Gauhati High Court in the case vs Haryana High Court in the case of

THE HONOT]RABLE SRI STICE P.SAM KOSHY TIIE HONOT]RABLE SRI TICE NARSINGRAO NANDIK A AND WRITPETITIONN .263ttOB 2024 $DEB, (per Hon'ble Sri Justice Narsing Nandikonda) Heard Mr. A.V.Raghu leamed counsel for the petitiofler, Ms. B.Sapna Reddy, lea Junior Standing Counsel for the Income Tax Department fo the respondent. Perused the record

2. This is a writ petition whe the proceedings are either challenged to the notices which wer issued under Section l48A and 148 of the Income Tax Act, 19 I (for short 'the Act') or the assessment orders those have been ssed under Section 147 of the Act which have been assailed

3. This writ petition is being tak up today only on one of the grounds, that the notices issued un er Section l48A of the Act and the subsequent initiation ofpro ings under Section 148 of t the Actby the jurisdictional Assess g Officer, whereas in terms of the arrendment that was brought t the lncome Tax Act by way of Finance Act, 2021 w.e.f., 0l .2021 onwards, proceedings i I i i I I ! i I I I I I i, 2 under Section l4gA ofthe Act as also under Section l4g of the Act ought to have also been issued and proceeded in a faceless manner.

4. The contention of the petitioner rs that the issue of proceedings being in violation of the Finance Act,2021i.e., the impugned notices under Section I4gA and Section I4g ofthe Act not being issued in a faceless manner, have already been dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME_TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section 14gA as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section I 5 I A of the Acr read with Notification lg/2022 dated29.03.2022. The said judgment passed by this Court has also been subsequently lollowed in a large number of writ petitions which were allowed on similar 0I 'tQ023) 156 raxmann.com I7g (Telangana)l I L ,/ // ,/, 3

5. Down the lirrc, we find the same issue has also been decided against the Reventre b vaflous High Courts i.e., by the Bombay High Court the case of TIEXAWAR-E TECHNOLOGIES LTD., vs. AS ISTANT COMMISSTONER OF INCOME TAX& OTTIERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. ON OF INDIA3, Punjab and Haryana High Court in the case of ATINDER SINGH BANGU vs. UNION OF INDIA4, and Tela a High Court in the case of SRI VENKATARAMANA RED Y PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of international taxation, Bo bay High Court in the case of ABHIN AMLKT,MAR SHAH vs INCOME TAX OFFICER, INTERNATIONAL TAXATIOIt' which is again on international taxation and central circle, High Co rt of Himachal Pradesh in the case of GOVII\D SINGH vs. COME TAX OFFICER?, Gujarat High Court in the se of MANSUKIIBI{AI n ' 1zozty 464 rrR 430 (Bom) 'l(2024) 156 taxmann.com 4 ' t(2024)h65 t"*r,il-.co. t '[202q lbl taxmarn.com 4l " [2024) 166 taxmann.com 679 (Bomba ' [2024) 165 taxnann.com I 13 (Hima E G( a I 5 (Punj (r1 e uha )l & Il Haryana)l )l l Pradesh)l i : i I i i i I I I : t i I i I I I 4 - DAHYABTIAI RADADIYA VS. INCOME TAX OFFICER, WARD 3(3X5)E, Jharkand High Court in the case of SHYAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CIIHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitionsro which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 o12023), decided on25.Q9.2024.

6. Even though the same issue having been decided by a large number of High Courts, we are still confronted with large filing ot identical matters on daily basis ranging between 5 to l0 writ petitions. That upon the instructions being sought from the f)epartment, they have been taking a solitary ground that the decision of the Bombay High Court in the case of Hexaware Technologies Ltd., (2 supra) as also the one which has been decidefl by this Court in the case of Kanakala Ravindra Reddy t 3202+ SCC online Guj 4012 " 2025 SCC Online Jhar 287 'u12023 : RJ-JD:4984-DBl I i I I i i !,/ (l supra) has been subjected to lenge, in a Specia.l Leave Petition i.e., SLP No.3574 of 20 before the Hon'ble Supreme Court and the Hon'ble Supreme ourt is seized of the matter. In addition, there are about 1200 S s also filed arising out of the same issue being decided by vario High Courts.

7. To a query being put to the ed counsel for the Revenue, they have categorically accepted e fact that there is no interim order granted by the Hon'ble Su Court in any of these matters pending before it. Mean le, fresh writ petitions ol identical nature are being piled up ore this Bench on daily basis and the pendency is getting in on matter which otherwise has already been dealt and decided b this very High Court itself.

8. On the one hand, even thou the order of this Court that was passed as early as on 14.09.20 3 and more 16 months have lapsed, till date, we do not find an remedial steps having been taken by the Income Tax Dep to take appropriate steps to either hold back issuance of notice er Section l48A and under Section 148 of the Act by the j sdictional Assessing Offrccr, rather the authoriti€s concemed in e teeth of series of decisions t I I I ! T E i t I I I I 't I i i I ! i I ! ! I t i I I 9 ! I 1 : I i ! I i : I I i ! I ! l (, by all the ma;or' High Ccrrrts in lndia are continuously stilt initiating proceedings under Section l48A of the Act and also initiating proceedings under Section 148 of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act, 2020 as also the Finance Act 2021.

9. Upon a query being put as to why can't this writ petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravindra Reddy (l supra), learned Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the lncome Tax Department where they would be required to hle equal number of SLPs before the Hon'ble Supreme Court and it would be further burdening the exchequer ol the Union of India. It was also the contention of the leamed Standing Counsel that no prejudice would be caused to the interest olthe petitioners in case itthis writ petition is kept pending till the hnalization of the SLPs pending before the Hon'ble Supreme Court and the fact that the petitioner is already enjoying the benefit of interim protection. Nonetheless, on the earlier query of this Court as to why the [ncome Tax Department have not come out with a mechanism to issue appropriate instructions or to take , appropriate steps in ensuring that p under Section 1484. of the Act as also th€ assessment under Seotion 148 ofthe Act are kept in a hold in the light the decisions dedcided by the various High Courts, it was tted by the leamed Standing Counsel that the said steps can onl be taken at ttre level of CBDT as any such steps would have to be taken Pan India and cannot be limited to any of these jurisdictional High Courts.

10. As a result of which, what are facing is steep increase of litigation day in and day out even ugh various orders have been passed by this High Court allowing petitions on the very same issue. The Income Tax authorities are still even now in 2025 atso initiating proceedings in ntravention to the provisions of Section l5lA of the Act and as result by now, more than 600 to 700 petitions have been already got piled up before this High Court on an issue which otherwise squarely covered by the judgment of this Court in the case f Kanakala Ravindra Reddy ( t supra). What is also surprising is the fact that though while allowing the writ petitions in the cas€ of Kanakala Ravindra Reddy (l supra), the Division B while reserving the right of the Revenue, has also protected interest of the petitioners 8 insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Finance Act, 2020 and, the Finance Act,202l. The petitioner assessee would be entitled to challenge or raise the other lega[ objections if the Revenue initiates fresh proceedings. The Department has made no endeavour in availing the said liberty that was reserved for the Revenue. On the conkary, they have been still sticking on to the stand, which this High Court as well as many other High Courts already held to be I l. It appears that because of the aforesaid liberty that this High Court had granted permitting the Revenue for initiating fresh proceedings as a one-time measure in a laceless manner, the Income Tax Department wants to take advantage of the same by protracting these proceedings which would enable them to meet the limitation that would otherwise come in the way. Likewise, if the writ petition is kept pending lor a considerable long period of time and finally at a later stage if the Hon'ble Supreme Court confirms the decision taken by this High Court as also by the other High Courts in which the S LPs are still pending- the Inco_m_rc Tax 1i ! 5 1 1 i i a I 9 Department would get ttre advantag of the liberty that is otherwise protected in favour of the Rev for initiation of fresh proceedings from the disposal of matters at a much later stage which would be advantageous and eficial to the Revenue and would be equally disadvantageous d detrimental so far as interest of the assesses are concerned. As consequence, the Income Tax Department gets an extended perio of time for initiation of fresh proceedings.

12. The alarming trend of docket losion in this Court, despite the clear precedent set in Kanakala avindraReddy (l supra), is a matter of grave concern. The Inco Tax Departuent's persistent initiation ol fresh proceedings, disre arding the established judicial pronouncements, has led to an recedented surge in litigation with over 600-700 petitions piti up on the same issue. This deliberate approach not only und es the principle ofjudicial precedent but also strains the judici I resources unnecessarily. The Department's strategy of awaiting Supreme Court's decision on pending SLPs while continuing initiate fresh proceedings appears to be a calculated move to buy time and circumvent limitation periods, rather than ad ng to the established legal fl-rsr:io;i.. ;juch cc,ridc,,1 ''2:rei :,..ious questions about the administrative effrciency and the respect for judicial pronoun@ments, particularly when this Court has already provided a balanced approach by preserving both the Revenue's rights and assesses interests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the lncome Tax Department itself and should have found out via media in ensuring that proceedings under Sections 148-4 and 148 should not have been issued in a faceless manner, at least tilt the Hon'ble Supreme Court decide the twelve hundred (1200) odd SLPs it is already seized ofor, at "vhich least the Income Tax Department should have found out some rernedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after the SLP's are decided by the Hon'ble Supreme Court on the very same issue. This again, the Income Tax Department, has not been able to give a convincing reply. except ior the facj that such a decision if at all a I : r 3 ! 'l i ; I E t t E 11 has to be taken, has to be taken for otherwise has to be by way of a poli level of Central Board of Direct whole of Indiar. iind which y decision and that too at the axes. Though the leamed Standing Counsel for the Income T the Delhi High Court dismissed a wri the one hand when the High Cou pendency, such notices which are petltlon are forcing the assessee to Court resulting in filing of hundreds Department contended that petition of similar nafure, on is struggling to reduce its nder challenge in this writ ock rhe doors of this High o new writ petitions which in the long run not only affects the dis p also consumes substantial time of matters again and again on daily basis. matter before the Hon'ble Supreme C many occasions, the Hon,ble Supreme matter has been reluctant in granting a Income Tax Department. yet. the a sal of the writ petitions but e Bench in hearing these Admittedly, in spite of the urt having been taken on ourt which is seized of the y interim protection to the thorities concerned at the State level are not ready to accept the v rdict passed by a majority of High Courts of diff'erent States on t things further worse, the Income T audacity by issuing notices continuously same tssue; and to make Department is showing nder Sections 148-.4. and i Ii t I 12 .\ 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXrr, on an issue whether it was justifiabte on the part of the Income Tax Department in not following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz., : "25. Mr. Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafl2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) Ltd. v. lTOr3 of which one of us (Justice G.S. Kulkarni) was a member, wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Cou( would not mean that till the same is set aside in a manner known to law, it would loose its binding force. Refening to lhe decision of the Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.14, the Cou( observed that the approach of the officials of Revenue of treating decisions being "not acceptable" was criticized by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court. " 11zOzs'S 170 taxmann.com 422 (Bombay)l '2 1t9281 113 ITR 589 (Bombay) " 120241165 taxmann.com 581/300 Taxman 452 (Bombay) 'o 1t99z1taxmaffr.com 16155 ELT 4ll (SC) 13 $. Sri Reddy is perhaps offrcers were not actuated passirE {he impugned o genuinely felt that the claim tenable and that, if it was would suffer. But what Sri are not concerned here otherwise of their conclus malafides but with the fact tha in saying that the by any mala frdes in They perhaps f the assessee was not , the Revenue ddy overlooks is that we the conectness or nor of any factual the ofiicers, in reaching in their conclusion, by-pas two appellate orders in regard to the same issue them, one of the Collector ( ich were placed before ls) aM the other of the Tribunal. The High Cou has, in our view, rightly criticized this conduct of the istant Collectors and the harassment to the asses of these officers to give authorities higher to them in t cannot be too vehemently e utrnost importance that, quasijudicial issues before t bound by the decisions of t e caused by the failure to the orders of e appellate hierarchy. lt phasized that it is of disposing of the m, revenue officers are e appellate authorities. The order of the Appellte Co lector is binding on lhe Assistant Collectors working ithin his jurisdiction and the order of the Tribunal is bi ing upon the Assistant Collectors and the Appellate lectors who function under the jurisdiction of the T nal. The principles of judicial discipline require that orders of the higher appellate authorities should followed unreservedly by the subordinate authorities order of the appellate autho the department - in itself an and is the subject matter of a ground for not following it u beer -ended by a com The mere fact that the y is not "acceptaue" to objectionable phrase - appeal can furnish no less its operation has nt court. lf this healthy <+= 't4 \ rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws.

12. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. lt is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue mafters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any beneFit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judiciat discipline and the need for giving effecl to the orders of the higher appellate authorities which are binding on them."

15. What is worryiry this Bench more is the fact rhat an endeavour is being made whole heartedly to ensure not to generate further litigation on issues which have been laid to rest by a large number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the I I E I I I I I I I t I I TI I * & E F I I E I i I i I I 15 Finance Act, 2020 and Finance Act, 021 . Now, in order to protect the interest of tlre Revenue as also at ofthe assesse€, it would be trite at this juncture, if we dispo of the writ petition with ao observation/direction that the dispos I of the instant writ petition in terms of the judgment rendered by is High Court in the case of Kankanala Ravindra Reddy (l sup ) shall however be subject to the outcome of the SLPs which w re filed by the Income Tax Department and which is pending co sideration before the Hon'ble Supreme Court.

16. In the given facts and circu tances, this Bench is of the considered opinion that unless and u til we do not timely dispose of matters which are squarely cove by the decision of this Court and which stands fortified by the d isions of the various other High Courts on the very same issu , the pendency of this High Court would further be burdened wh ch otherwise can be decided and disposed ofas a covered matter

17. So far as th€ inter€st ofthe Re enue is concerned, we are of the considered opinion that the intere t of the Revenue has already been considered aod protected, as has been observed in paragraphs i : i I I I i I l I t6 36,37 ar:d 38 ofthe order which, for ready reference, is reproduced hereunder:

36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent- Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders gefting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered acmrdingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.

37. The preliminary obiection raised by the petitioner is sustained and all these writ petitions stands allowed on this very iurisdictional issue. Since the impugned notices and orders are getting quashed on lhe point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which slands reserved to be raised and contended in an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right L7 confened on the Revenue proceed further if they so order of the Supreme uld remain reserved to t from the stage of the in the case of Ashish Agarural, supra.

18. We would only further like make observations that since we are inclined to dispose of the in writ petition, conscious of the fact that the earlier order of s High Court in the case of Kanakala Ravindra Reddy (l sup ls subjected to challenge before the Hon'ble Supreme Co in SLP No.3574 of 2024, preferred by the Income Tax Dep ent, we make it clear that allowing of the instant writ petitio is subject to outcome of the aforesaid SLP preferred by the Rev ue against the decision of this High Court in the case of Kanaka Ravindra Reddy (l supra). This, in other words, would mean t either of the parties, if they so want, may move an appropnate tition seeking revival of thrs writ petition in ttre light of the dec sion of the Hon'ble Supreme Court in the pending SLP on the ve same rssue.

19. Accordingly, the instant petition stands allowed 1n favour of the assessee so far as the issue of jurisdiction IS concemed. As a consequence, the impugned notice under challenge under Sections 148-4 an 148 stands set aside/quashed l I --::r 18 The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this High Court in the case of Kunkanala Ravindra Reddy (l supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY// Sd/- T. JAYASREE DEPUTY REGISTRAR SE OFFICER Hyderabad - 500004.

1. The Income Tax Officer. Ward- 6(1), l.T. Towers, A.C. Guards, Masabtank, ? 9ne CC to SRt A.V.RAGHU RAM, Advocate IOPUCI 3. orre c-c to M/s BoKARo sApNA REbrw;il:sdFbn rrucoruE rnx To 4 PSK. PVL loPUCl Two CD Copies k( HIGH COURT DATED:2810412025 ORDER WP.No.26311 of 2024 .., .rit,, /',f'ii 1 ,-^ l sr<i 1 AUE (i( a \*l ,. \._ LTaiu ALLOWING THE WRIT PETITION WITHOUT COSTS ( A ? 2\+ 0 I : I I I I I I t I g I i i ! I j i It I I g : i I l ; :i : l l : . . .: I I i