NI(ANALA RAVTNDRA RI,DDY v. INCOME-TAX OFF.r lERr decided on

challenged to the notices which were issued under Section 148A and 148 of the lncome Tax Act, 1961 (for short 'the Act') or the assessment orders those lrave been passed under Section 147 of the Act which have been assailed.

3. This writ petition is being taken up today only on one of the grounds, that the notices issued under Section 148,{ of the Act and the subsequent initiation of proceedings under Section 148 of the Act by the jurisdictional Assessing Officer, whereas in terms of the amendment that was brought to the Income Tax Act by way of Finance Act, 2O2l w.e.f., 01 04'2021 oy[ds, proceedings ."/ I 2 under Scction 148A of the Act as also under Secr ln 148 of the Act or,rght to har.,e also been issued and proceedetl in a faceless rranncf

1. The contention of the petitioner is that the issue of proceedings Lreing iu violation of the Finance Acr , 2021 i.e., the impugned notices urrdcl Scction 148A and Section 48 ol the Act not being issued in a laceless manner, have already, I een dealt with and decided by this Courl in Lhe case ol l(,{NI(ANALA RAVTNDRA RI,DDY vs. INCOME-TAX OFF.r lERr decided on 14.09.2011 whereby' a batcl'r of writ petitions wr:r 3 allowed and the proceedings initiated under Section 148A as als,r under Section 148 ofthe Act rvere helcl to be bad with consequential reliefs on the ground ol- it being in violation of the provisions of S t ction 15 lA of the Act read rvith Notification 1812022 datcd 29.03.21)22. The said judgment passcd bv this Court has also been subseqrr.:ntly followed in a lalge number of rvrit petitions which were allcr,,ed on similar ' [(2023) I 56 taxm]n"h.corn I 7ti ( l'elangana)l J ,,',/'

5. Dow'n the line, we find that the same issue has also been decided against the Reverlue by various High Courts i'e', by the Bor.rrbay High Court in the case of HEXAWARE TE,CHNOLOGIES LTD., VS. ASSISTANT COMMISSIONER OF- INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIAT, Punjab and Haryana High Courl in the case ol'JATINDER SINGH BANGU vs. IJNION OF INDIAl, and.Telangana F'ligh Court in the case of SRI VENKATARANIANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect ol international taxation, Bornbay High Court in the case of AIIHIN ANII KUMAR SHAH vs. INCONIE TAX OFFICER' INTERNATIONAL TAXATION6 w'hich is again on international taxation and central circle, High Court of Himachal Pradesh in the case ol' GOVIND SINCH vs. INCOME TAX OFFICER?, Cujarat High Coud in the case of MANSUKHBHAI ' lzoz+1 164 ITI{ 430 (Bom) '1Q024) 156 taxmann.com 478 (Gauhati)l " tQO24) 165 taxmann.com I I 5 (Punjab & Haryana)l ' 12024) I 67 taxtnann.com 4 t I (Telangana)l " 12024) 166 taxtnann.com 679 (Bombay)l '12024) 165 taxmann.com 113 (Himachal Pradesh)l 1 4 :.. DAHYABHAT RADADIYA vs. INCOME TA { OFFICER, WARD 3(3X5)8, Jharkand Itigh Court in rhe cas: of SHYAM SUNDAR S,\W vs. IINION OF lNDIAe, Rajasthar Jigh Courl in the casc of SHARDA DEVI CHHAJER vs. I\TtONtU TAX OFFICER & ANOTHER and batch of wrir pe irionsL(' which stood decided on 19.03.2024. Sirnilar views have al ,o been taken b1, the Division Bcnch ol' Calcutta lligh Court r thc case ol (;IRDHAR (;OPAL DALMIA vs. I-.INION OF I'\ DtA & ORS (M.A.T 1690 of'2023), dccidcd orr 25.09.2024. 6 I:ven though tltc sautc issuc having bcen dec < ed by a large number of High Courts, rve are still conlronted rvitl' arge liling ol identical mattcrs on daily basis ranging between i to I0 writ petitions. That upon thc instructions being soL t ht fiom thc I)epartment, thcy have bcen taking a solitary qrt und that the dccision of tlre Bornbay Fligh Coun in the casr. f Hexawure Technologies Ltd., (2 supra) as also the one \\ r ch has been dccided by this Courr in the case of Ktnokalo R,r ,indra Reddy 82024 SCC ODLine cuj 4012 '2025 SCC Onl.ine Jhar 287 "t 12023 : IU-JD :4984-DIJ l ./, 5 (l supra) has been subjected to challenge in a Special Leave Petition i.e., St.P No.3574 of 2024 before thc Hon'ble Supreme Court and the I[on'ble Supleme Court is scized of the matter' In addition, thcre are about 1200 SLPs also filed arising out of the same issuc being decided by various High Courts.

1. To a qucrl being put to the leamed counsel for the Revenue, they have categorically accepted the fact that there is no interirn order granted by- thc tlon'bie Suprerne Court in any of these matters pending belbre it. Meanu'hilc, fresh writ petitions of identical nature are being piled up belore this Bench on daily basis and the pendency is getting increased on matter which otherwise has alrcady been deall and decided by this very High Court itsell'

8. On the one hand, even though the order of this Court that was passed as carly as on 14.09.2023 and more 16 months have lapsed, till date, wc do not find any remedial steps having been taken by the Income -l-ax Department to take appropriate steps to either hotd back issuance ol notice under Section 148A and under Section 148 of the Act by the jurisdictional Assessing Offrcer, rather the authorities concemed in the teeth of series of decisions I 6 bl all the nta-jor High Coufts in India are corrr Lnuouslv still initiating proceedings under Section l4gA o1'thc Act and also rnltrating procecdings under Section l4g ot' the Act in c.ntraventio.r t. the arlendntents brought i,to the Irr,..rne .l.ax Act pursuant to the Irinancc Act, 2020 as also the Finanl: Act 102 l.

9. lipon a query being put as ro u,h], can,t this ,i..it petition be disposed ol' in the teeth of tlre dccision rc'nder.cd h, rhis coLrrt in the case of Knnakaltt Ravintlra Redd.l,( ) suprel, [.- r ned Standing Cloirnscl for the Income'l'ax l)epartment cor.rtcnds llri , thosc u,oul<j urrnecessarilv burden the Income '['ax l)eparlnre rr wherc they would be rcquired to tile equal number of SI_ P s belore the tlon'blc Suprernc Court antl it wtruld hc t'urrhcr, Ir-rrdcnine the cxchcquer ol'the [Jnion of India. It was arso trre co r crtion of the Icamed Stanc{ing (lounscl that,o pre.iudicc would br: :aused to the interest of the petitioners in casc if this writ petition is kept pending till the finalization of the SLps pending befor.e rhc Hon,ble Supreme Court and the lact that the petitioner is aL c rdy enjoying the beneflt of interim protection. Nonetheless, on th: earlier query of this Court as to why the Income 'l'ax Dcpartmelrt 1 rve llor colne out with a mechanism to issue appropriate instructi: rrs or to take appropriate steps in ensuring that proceedings under Section l48A olthe Act as also the assesslnenf orders under Section 148 of the Act are kept in a hold in the light of the decisions dedcided by the various tligh Courts, it rvas submitted by the leamed Standing Counsel that the said stcps can only be taken at the level of CBDT as any such steps would have to be taken Pan lndia and cannot be lirnited to any of thcsc jurisdictional I Iigh Courts.

10. As a result of which. whut rve are lacing is steep increase of litigation day in and day out cven though various orders have been passed by this High Court allowing writ petitions on the very same issue. The Income Tax authorities concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 15lA of the Act and as a rcsult by now, more than 600 to 700 petitions have been already got piled up befbre this High Court on an issue which otherwise stands squarely covered by the judgment of this Court in the case ol Kanakala Ravindra Reddy (1 supra). What is also surprising is the fact that though while atlowing the writ petitions in the case of Kanakala Ravindra Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners / .// 'I I insolar as the liberry which was granted to th. Ilcvenue for initiating fresh proccedings strictly in accordancc u i i tlre amended provisions o1'thc Act, as amendccl by thc Financc ..ct. 1020 and thc Financc Act, 2021. '[hc petitioner asscssee woull bc e ntitled to challcnge or raisc the other legal objections if thc Rr,' enr-rc initiates fresh procccdings. The Deparlnrent has made nc cndeavour in ai.'ailing the said libertv that was rcserved fbr thc Rr r enue . On the contrary, thcy havc been still sticking on to tltc str,r rl. which this High (iourt as r.r'cll as many other High Courts alr. r dl held to be I L It appcars that because ofthe aibrcsaid libcrt., that this Fligh Court had qranlecl permitting the Re'"cnue lbr r itiaring lresh procecdings as a one-time measure in a faccle:s ntanner, the lncornc Tax l)eparlrnent wants to take advantagc ,t'thc same by protracting these proceedings which would enablc tlrr m t<t nleet the limitation that rvould otherwise corne in the wav. I- kcu,ise, if the writ petition is kept pending for a considerable lorrg reriod of tirne and tinally a1 a later stage if the Hon'ble Supreme ( our-t cont'irnts the decision taken by this High Couft as also b1 t re other lligh Courts in rvhich the SLPs are still pending, tlre Income Tax 9 Department would get the advantage ol'the liberty that is otherwise protected in favour of tl-re Ro'cnuc lbr initiation of fresh proceedings lrotn the disposal of thcse llrattcrs at a lnuch later stage rvhich would bc advantageous and benetjcial to the Revenue and would be equally disadvantageous and detrimontal so far as interest ol the assesses are concemcd. As a conscquence, the Income 'lax Department gets an extcndcd period of'time lbr initiation of fiesh proceedings. t2. The alarming trend of'docket explosion in this Court, despite the clear precedent sel in Kunakala Rovindra Reddy ll supra), is a matter of grave concern. The lncome 1'ax Department's persistent initiation of fresh proceedings, disregarding the established judicial pronouncements, has led to al1 unprecedented surge in litigation u,ith over 600-700 petitions piling up ou the same issue' Ihis deliberate approach not only undermines the principle of judiciat precedent but also strains the judicial resources unnecessarily. 'fhe Department's strategy of awaiting the Supreme Court's decision on pending SLPs white continuing to initiate tiesh proceedings appears to be a calculated rnove to buy time and circumvent limitation periods, rather than adheling to the established tegal 10 position. Such conduct laiscs serious quesrio I ; about the adnrinistrative efficiency and the respecr lor judicial pronoun ccrr ents. parlicularlv when this Courl has irli .ac.lr provided a balanced approach br prcserving both thc Rerent J's r.ights and assesses r n teresl s ll- Anotltcr rrspecL rvhiclr needs to be considerc<i ir that in lact it should havc becn realizcd by the Incourc Tax Depalr rent itscll-and should ha',e lbr:nd out via ntedia in ensr-rring th:. procccclinus under-Sections 148-A and 148 should not have h,., n issued in a lacclcss mann.r, at least till the FIon'ble Supreme ( t Lrr.[ decicle the t,'velve hundred ( 1200) odd SLPs which it is alreadr, : :ized of or, ar least the [ncontc Tax Department should have fi,r ncl out sonte rerncdial stL'ps to ensure that rvherever the autlto.r .ics intcnd to initiate proceedings under Sections 148-A and l4ti. i ther lhan in a faceloss rnanurr', the proceedings should have I,ecn del-crred u,ithout precipitating the matter lurther intirnating tlu assessee that they shall initiatc appropriate proceedings only alrcr the SLp's are decided by the l{on'ble Supreme Court on the i t r r salne issue. This again, the Incomc Tax Department, has not beer- able to give a convincing reply, exccpt for the fact that such a tl : ision if at alt \ 11 has to be taken, has to be taken for the whole of India' and which otherwise has to be by rvay ol a policy decision and that too at the ler.clofCcntralBoardofDirect'faxes'Thoughthclearned Standing Counsel for the lncome '[ ax Dcpartment contetrded that the Dethi lligh Court dismissed a q'rit petition of sirnilal nature' on the one hand when the High Court is struggling to reduce its penclency, such notices which are under challenge in this w'rit petition are fbrcing the assessee to knock the doors of this High Court resulting in liling of hundreds of ncw rvrit petitions which in the long run not only affects the disposal ol thc writ petitions but also consumes substantial time of the Bench in hearing thcse matters again and again on daily basis' Admittedly' in spite of the rnatter betbre the t lon'ble Suprernc Court havirlg becn taken on many occasi<lns, thc Hon'ble Supreme Court rvhich is seized o1'the lnatter has been reluctant in granting any interitTr protection to the Income Tax Department. Yet, the authorities concerned at the State [eve[ are not ready to accept the verdict passed by a majority of High Coufts of different States on the same issue; and to make things f urther worse' the Income Tax Department is showing audacity by issuing notices continuously under Sections 148-A and 72 148 through the jurisdictional Asscssing Officer rr I e re as it ought to have been only in the faceless manner. il4. Lr the case ol BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXr', on an issui ,vhether it- was iustifiable on the parL of the Income Tax Depl tment Ln not lbllou,ing an order passed by the adjudicating author ty only on the ground that the appeals are pending, the Divisiorr Bench o[ the I ligh Court of Bornbav held at paragraph No.25 as r r der, viz., : "25 tt4r Parrdwalla has rightly drawn out atterrt cn to the decision of this Court rn Commissioner of lncome Ta,l vs. Smt. Godavaridevi Sarafr2 as also the recent decision if the co- ordinate Bench of this Court in Samp Furniture (P) Lt1. v. lTO13 of which one of us (Justice G.S. Kulkarni) was a memlr|r. wherein the Court categorically observed that the Revenue raving not "accepted" the ludgment of the High Court would not rr ian that till the same is set asrde in a manner known to law, it wo -r rl loose its binding force. Referring to the decision of the Supre r ,: Court in Union of India vs. Kamlakshi Finance Corporatiorr l_td.14, the Court observed that the approach of the offtcials of i r-.venue of treating decisions being "not acceptable" was critic zld by the -'t ) relevant Supreme Court. ln such decision, following are t observations made by the Supreme Court. 't 11zOZS1 I 70 rarmann.com 422 (Bornbay)l '' 1t 9281 1 13 It'R 5 89 (tlombay) " 120241 165 taxmann.corn -s8l/300 l'axman 452 (Bomt,z y) 'o 1tOOU] taxrnann.com 16i55 ELT 433 (SC) l \ 13 "6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that. if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks ts that we are not concerned here with the correctness or otherwrse of thelr conclusion or of any factual malafides but with the fact that the officers' in reaching in their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them. one of the Collector (Appeals) and the other of the Tribunal The High'Court has, rn our view, rightly crrticrzed this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hrerarchy lt cannot be too vehemently emphasized that it is o{ utmost importance that in disposing of the quasijudicial issues before them, revenue officers are bound by the decisions of the appellate authoritles' The order of the Appellte Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal' The principles of iudicral dtscipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an ob.iectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court lf this healthy 74 -.i ru e rs not followed, the result will only be J tdue harassment to assesses and chaos in adminrsir ltion of tax laws. 12 We have dealt with thls aspect at some 3 rgth, because rt has been suggested by the l(r: rned Additronal Solicrtor General that the obse^ z i:ions made by the High Court have been harsh )r the officers It rs clear that the observattons of th,r High Court seemrngly vehement, and app I rnfly unpalatable to the Revenue. are only intended tl curb a tendency rn revenue matters which, if allo!/r,d to become widespread, could result in consrce able harassment to the assesses-pubhc without any I :nefit to the Revenue. We would like to say tha the department should take these observations r the proper splrit. The observations of the High )ourt should be kept in mind in future and the utmost .r gard should be pard by the adjudicattng authorities an.l the appellate authorrttes to the requirements of tu Iicial disciplrne and the need for giving effect to the c ders of the hrgher appellate authorities which are i i .ding on thcnl."

15. What is \\,orrying this tlcnch lnore is ll t fhct tliat an elldeavour is b,-'ing made \\,hole hcartedly to ensrrr.c iot to gencrate further litigation on issues r.vhich have been laid tt ,est by a large number ol lJigh Courts all of rvhom have taken a I rnsistent stand that the action ol'Lhe Income 'fax Department being . iolative of the 15 FinanceAct,2020andFinanceAct,2021'Now,inordertoprotect the intcrest ol t[-rc Revenue as also that ol'the assessee, it would be trite at this jLrncttrre, if wc disposc of the writ petition with an obscrvationld irection that the disposal of thc instant writ petition in teltns of the judgrnent rendered by this High Court in the case of Kunkanala Rat,intlru Retttly (| supra) shall horvcvcr be sub.ject to the outcontc of the SLPs which were liled by the Incomc Tax Departurent and which is pcnding consideration belbre the l lon'blc Supretne Court. 1 (r. In thc givcn f acts and circuustances, this Bench is of thc considered opinion that unless and until we do not timely dispose ol'uratters ivl-rich are squarely covered by the decision of this Coutt and rvhich stands lortitled by the decisions of the various other I lieh Clourts on the very same issue, the pcndency ol this Higtr Courl would turther be bur<Iened which otherrvise can be decided and disposed of as a covered matter' So far as the interest of the Revenue is concemed' we are of the considered opinion that ttre interest of the Revenue has already been considered and protected, as has been observed in paragraphs 1,6 36,37 anrl 38 of tirc order u,hich. lbr ready referenc,: is rc1-rr.oduced hereunder: 36 l-or all the aforesaid reasons, the tmpugne I notices issued and the proceedings drawn by the resp )ndent- Department is netther tenable, nor su! t nable The notices so rssued and the procedure adople I being per se illegal, deserves to be and are accorcir gly set asrde/quashed. As a consequence all the rr tugned orders gettrng quashed, the consequential orders lassed by lhe respondent-Department pursuant to thr) notices tssued under Sectton 147 and 148 would ; I o get quashed and it is ordered accordingly The T€a lon we are quashing the consequential order is on the pr nciples that when the initiatron of the proceedlngs IS )lf was procedurally wrong. the subsequent orders :,! o gets nullrfred automatically.

37. The preliminary oblectron raised by the peii oner is susta,ned and all these wnt petitions stands al c,^/ed on th s very lunsdicttonal issue. Since the impugnel notices and orders are getttng quashed on the 6:rnt of lurisdrction, we are not incltned to proceed fu t er and decide the other rssues rarsed by the petitrore - which stands reserved to be ratsed and contende c in an appropriate proceedtngs.

38. Since the Hon'ble Supreme Court had. rn t re case of Ashrsh Agarwal, supra as a one{ime T easure exercrsing the powers under Article 142 rf the Constitution of lndia, permitted the Revenue tc roceed under the substituted provisions, and this Courl illowlng the petitions only on the procedural flaw, :l e right I I I i I I i i i I I I I i I i I 77 conferred on the Revenue would remaln reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra.

18. We would only lur:ther like to make observations that sincc we are inclincd to dispose of the instant writ petition, conscious ol the lact that the carlicr ordcr of ttris High Court in the case ol' Kanakala Ravintlro Reddt' (l strpra) is subjected to challenge bcfbre the Hon'bte Suprcme Court in SI-P No'3574 ol 2024' prct'crrcd by the Inconre'l'ax [)epartnlent, we make it clear that allorving of thc instant ivrit pc'tition is subject to outcoure ol the atbresaid SLP pref'erred by the Revenue against the decision of this High Clourt in the case of Kontknln Ravindra Reddy (l supra)' This. in othcr words, rvould uean that either of the parties, il they so want, rnav ltlo!'e an appropriate petition seeking revival ol'this writ pctition in the ligtrt of thc decision o1'the Hon'ble Supreme Courl in the pending SLP on the very same issue'

19. Accordingty, the instant writ petition stands allowed in f'avour of the assessee so far as the issue of jurisdiction IS concerncd. As a consequence, the impugned notice under challenge under Sections t48-A and 148 stands set aside/quashed' \ t I \ I 1B 'l-he consequenLial ortlers. it'an1,, also stand set a:ile/quashcd in similar tcnns as huve bccn passed by this IIigh Co,-r r in tltc case of Kankonalt Rtvin ra Rcdil),(l sLrpra). Therc shrrll .c lr() ordet.as to costs Consequently, rtrisccllaneous pctitions pcndilll if any, shall stand closed. To, //TRUE COPY// 5i )i. L. VIJAYA LAXMI )Asr;rsteNT REGtSTRAR \'\ '\- --- - I \ SECTION OFFICER '1 . The Assessment Unit, lncome Tax Departmen$, Center. New Deihi, Room No.401, 2nd Floor. E-R Stadium, New Delhi - 1 10 003 [.i tional e-Assessment ar p, Jawaharlal Nehru

2. The Assistant Commissioner of lncome Tax. W Signature Towers, Sy.No. 6(P) of Kondapur, Sy 37(l Botanical Gardens, Serlingampally lr,4andal. Ranga Rr: - 500 084, Telangana. :d 7(1), Hyderabad, ) of Kothaguda, Opp. i, ry District, Hyderabad I

3. The Principal Commissioner of lncome Tax officer, H1c :rabad-1 , AC Guards, lvlasab Tank, Hyderabad - 500 004 l.T.Towers, {

4. One CC to SRI A.V.A.SIVA KARTIKEYA, Advocate [O', JC] 5. One CC to Ms. B.SAPNA REDDY, Sr. SC tNCOtr/tE TA) [OplJC] 6 BSR LS Two CD Copies HIGH COURT DATED:31 10712025 /,-. /',.')t C t- :. I 2 Il tlDU 65 1/ ,)t ,n Ia l ii,r.) ORDER WP.No.22517 ot 2025 ALLOWING THE WRIT PETITION, WITHOUT COSTS \\ il ;,