AMTUL FAHEEM, WO. ZAFAR v. The Assistant Commissioner of income

, (pcr Hon hle Sri Justice Narsing Ra Narulikonda) Heard Mr.Thanneru Chaitany Kumar, leamed counsel for the petitioner, Ms.B.Sapna Redd , learned Junior Standing Counsel for the Income Tax Departme t for respondent Nos.l to 4 and Mr. B. Mukherjee, leamed couns I representing the Union of India for respondent No.5. Perused the record

2. This is a writ petition where he proceedings are either challenged to the notices which were ssued under Section 148.4 and 148 o[the Income Tax Act, 1961 (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 taken p today only on one ofthe grounds, that the notices issued unde Section 148,{ of the Act and the subsequent initiation of pro dings under Section 148 of the Act by the j urisdictional Assessin Officer, whereas in terms of the amendmen)Pat was brought to he Income Tax Act by way r- \ --.".1 2 of Finance Ac| 2021 w.e.f., 01.04.2021 onuards. proceedings under Section l48A olthe Act as also under Section 148 ofthe Act ought to have also been issued and proceeded in a faceless manner.

4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Act,2021 i.e., the impugned notices under Section 148A and Section 148 of the Act not being issued in a faceless manner, have already been dealt with and decided by this Court in the case ol KANKANALA RAVINDRA REDDY vs. INCOME-'IAX OF-FICERI decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section 148A as also under Section 148 olthe Act were held to be bad with consequential relieti on the ground of it being in violation ofthe provisions of Section I 5lA of the Act read with Notification 1812022 dated 29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allorvcd on similar ' l(2023) 1 56 taxmann.com 178 (Telangana)l 3

5. Down the line, we find that t e same issue has also been decided against the Revenue by vanous High Courts i.e., by the Bombay [{igh Court in e case of HEXAWARE TECHNOLOGIES LTD., vs. ASSI TANT COMMTSSIONER OF INCOME TAX & OTHERS2, uhati High Court in the case ofRAM NARAYAN SAH vs. UNI N OF INDIA3, Punjab and Haryana High Court in the case of J TINDER SINGH BANGU vs. UNION OF INDIAI, and Telang na High Court in the case of SRI VENKATARAMANA REDD PATLOOLA vs. DEPUTY COMNIISSIONER OF INCOME AXs where the issue was in respect of intemational taxation, Bom ay High Court in the case of ABHIN ANILKUMAR SHAII VS. NCOME TAX OFFICER, INTERNATI ONA L TAXAT I O N6 hich is again on international taxation and central circle, High Cou of Himachal Pradesh in the case of GOVIND SINGH vs. I COME TAX OFFICERT, Gujarat High Court in the c se of MANSUKHBHAI '1zoz11464 ITR 430 (Bom) '[(2024) 156 taxmann.com 478 (Gauhati 'l(2024) 165 taxmann.com 115 (Punjab ' 12024) 1 67 taxmann.com 41 I (Telanga ( mba v (H mAC a Pradesh)l h 65 taxmannv.com 79 Bo 3I 2 24 0 4 0 2 [2 66 tax ) ) )l 6 l I 1 6 Haryana)l 4 .l DAHYABHAI RADADTYA vs. INCOME ].AX OFFICE,R, 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 CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitionsr0 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 of 2023), decided on25.09.2024

6. Even though the same issue having been decided by a large number of High Courts, we are still confronted with large filing of identical matters on daily basis ranging between 5 to l0 writ petitions. That upon the instructions being sought from the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case ol Heraware Technologies Ltd., (2 supra) as also the one which has been t decide( by this Court in the case of Kanakals Ravindra Redtly tz02+ SCC Online Guj 4012 '2025 SCC Online Jhar287 72023 : RJ-JD : 49 8 4- DB l o ' 5 (l supra) has been subjected to c allenge in a Special Leave Petition i.e., SLP No.3574 of 2024 before the Hon'ble Supreme Court and the Hon'ble Supreme C urt is seized of the matter. In addition, there are about 1200 SL s also filed arising out of the same issue being decided by various igh Courts.

7. To a query being put to the lea ed counsel for the Revenue, they have categorically accepted the laot that there is no intenm order granted by the Hon'ble Sup me Court in any of these matters pending before it. Meanw ile, fresh writ petitions of identical nature are being piled up be ore this Bench on daily basis and the pendency is getting increas on matter which otherwise has already been dealt and decided by this very High Court.itself.

8. On the one hand, even thoug the order of this Court that was passed as early as on 14.09.202 and more I 6 months have lapsed, till date, we do not find any remedial steps having been taken by the Income Tax Departmen to take appropriate steps to either hold back issuance of notice u der Section 1484. and under Section 148 of the Act by the juri dictional Assessing Officer, rather the authorities concerned in th teeth of series of decisions 6 by ati the majcr iiigh Coui-ts in India are continuously still initiating proceedings under Section l48A of thc Act and also initiating proceedings under Section 148 ol thc Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Financc Act 2021

9. Upon a query being put as to why can't this r,r'rit petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanukala Ravindra Reddy (l supra), leamed 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 S LPs belore the Hon'ble Supreme Court and it would be further burdening the exchequer of the Union of India. It was also the contention ol the leamed Standing Counsel that no prejudice would be caused to the interest of the petitioners in case if this writ petition is kept pending till the finalization of the SLPs pending before thc Ilon'bte 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 Income Tax Department have not come out rvith a mechanism to issue appropriate instructions or to take 7 appropnate steps in ensuring that p ceedings under Section l48A of the Act as also the assessment o rs under Section 148 ofthe Act are kept in a hold in the light of he decisions dedcided by the various High Courts, it was submi ted by the leamed Standing Counsel that the said steps can only e taken at the level of CBDT as any such steps would have to be ken Pan India and cannot be limited to any of these jurisdictional igh Courts

10. As a result of which, what we facing is steep increase of litigation day in and day out even th ugh various orders have been passed by this High Court allowing rit petitions on the very same issue. The Income Tax authorities c cemed are still even now in 2025 also initiating proceedings in c ntravention to the provisions of Section I 5 I A of the Act and as a esult by now, more than 600 to 700 petitions have been already ot piled up before this High Court on an issue which otherwise s ds squarely covered by the judgment of this Court in the case f Kanakala Ravindra Reddy (l supra). What is also surprising s the fact that though while allowing the writ petitions in the se of Kanakala Ravindra Reddy (l supra), the Division Benc while reserving the right of the Revenue, has also protected t interest ol the petitioners 8 insofar as the liberry 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 legal objections il the Revenue initiates fresh proceedings. The Department has made no endeavour in availing the said liberty that was reserved for the Revenue. On the contrary, they have been still sticking on to the stand, which this High Court as well as many other High Courts already hetd to be bad. 1 L It appcars 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 faceless manner, the lncome 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 fbr 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 SI-Ps are still pending, the Income Tax 9 Department would get the advantage protected in favour of the Rev ue for initiation ol fiesh f the liberty that is otherwise proceedings from the disposal ofthe matters at a much later stage which would be advantageous and eneficial to the Revenue and would be equally disadvantageous detrimental so far as interest of the assesses are concemed. As a onsequence, the lncome f ax Department gets an extended period of time for initiation of fiesh proceedings

12. The alarming trend of docket xplosion in this Court, despite avindra Reddy (l supra), rs a the clear precedent set in Kanakala matter of grave concern. The Inco e Tax Department's persistent initiation of fresh proceedings, disre arding the established judicial pronouncements, has led to an u recedented surge in litigation with over 600-700 petitions pilin up on the same issue. This deliberate approach not onlY un ines the principle of judiciat precedent but also strains the judici resources unnecessarily. The Department's strategy of awaiting Supreme Court's decision on pending SLPs while continuing o initiate fresh proceedings appears to be a calculated move to buy time and circumvent Imltat on penods rather than a ering to the established legat I posltion. Such coi-iciuct ratses serious questions about the administrative elficiency and the respect for judiciai I I pronouncements, particularly when this Court has already provided a balanced approach by preserving both the Revenue's rights and assesses tnterests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the income Tax Department itself and should havc fbund crur via media in ensuring that proceedings under Sections !48.A and 148 should not have been issued in a faceless man,er, at l.ast till the Hon,ble Supreme flourt decide ihe twelve hundrcd (1200) odd SLps rvhich it is atready seized ofor, at least the lncome Ta;i Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and l4g, other than in a faceless manner, the proceedings should have been deferred without pree ipitating the matter further intimating the assessee that they shall initiare 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 fcr thc fact that such a decision if at all 11 has to be taken, has to be taken for e whole of India, and which otherwise has to be by way of a poli decision and that too at the level of Central Board of Direct axes. Though the leamed Standing Counsel for the Income T Department contended that the Delhi High Court dismissed a wri petition of similar nature, on the one hand when the High Cou is struggling to reduce its pendency, such notices which are nder challenge in this writ petition are forcing the assessee to ock the doors of this High Court resulting in hling of hundreds f new writ petitions which in the long run not only affects the dis sal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily bas s Admittedly, in spite of the matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Supre Court which is seized of the matter has been reluctant in grantin any interim protection to the Income Tax Department. Yet, th authorities concerned at the State level are not ready to accept t e verdict passed by a majority of High Courts of different States o the same issue; and to make things further worse, the Income Tax Department is showing audacity by issuing notices continu sly under Sections 148-A and 72 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner. t

14. In the casc ol BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXrr, on an issue rvhether it was justifiable on the part of the Income Tax Department rn not following an order passed by the adjudicating authority only on the ground that the appeals arc pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz., : "25. tvlr. Paridwalla has rightly drawn out attention to the decrsion of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafr2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) Ltd. v. lTOl3 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 Court would not mean that till the same is set aside in a manner known to law, it would toose its binding force. Referring to the decision of the Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.14, the Court 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 Courl. " 11Z0ZS1 170 taxmann.com 422 (Bombay)l '2 1t9281 I l3 ITR 589 (Bombay) t3 to lt}gZl taxmann.corn l6155 ELT 433 (SC) TZOZ+1 165 taxmann.com 581i300 Taxman 452 (Bombay) 13 "6. Sri Reddy is perhaps rig officers were not actuated passing the impugned ord genuinely felt that the claim of tenable and that, if it was a would suffer. But what Sri Red are not concerned here wit otherwise of their conclusio malafides but with the fact that in their conclusion, by-passed regard to the same issue whi them, one of the Collector (Ap the Tribunal. The High Court criticized this conduct of the the harassment to the assess of these officers to give e authorities higher to them in the cannot be too vehemenfly e utmost imporlance that, i quasijudicial issues before the bound by the decisions of the The order of the Appellte Coll Assistant Collectors working wit the order of the Tribunal is bind t in saying that the y any mala fides in They perhaps the assessee was not pted, the Revenue y overlooks is lhat we the correctness or or of any factual he officers, in reaching appellate orders in h were placed before ls) and the other of as, in our view, rightly sistant Collectors and caused by the failure ct to the orders of appellate hierarchy. lt hasized that it is of disposing of the , revenue officers are appellate authorities. r is binding on the in his jurisdiction and ng upon the Assistant Collectors and the Appellate C under the jurisdiction of the Trib judicial discipline require that t appellate authorities should be llectors who function nal. The principles of orders of the higher ollowed unreservedly by the subordinate authorities. e mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an ectionable phrase - and is the subject matter of an ppeal can furnish no ground for not following it unl ss its operation has been suspended by a compete t 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. i l I "..]

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 Courl, 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 matters 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 sprrit. 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 JUdicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them."

15. What is worrying this Bench more is the fact that 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 15 Finance Act,2020 and Finance Act, 2 I . . Now, in order to protect the interest of the Revenue as also t ofthe assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the dispos of the instant writ petition in terms of the judgment rendered by is High Court in the case of Kankanala Ravindru Reddy (l supra shall however be subject to the outcome of the SLps which we filed by the Income Tax Department and which is pending con ideration before the Hon,ble Supreme Court.

16. In the given facts and circum nces, this Bench is of the considered opinion that unless and u il we do not timely dispose of matters which are squarely covered by the decision of this Court and which stands fortified by the de isions of the various other High Courts on the very same issue the pendency of this High Court would further be burdened whi h otherwise can be decided and disposed of as a covered matter.

17. So far as the interest of the Rev nue is concemed, we are of the considered opinion that the interes of the Revenue has already been considered and protected, as has observed in paragraphs 75 36,37 and 38 cfthe 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 getting quashed, the consequential orders passed by the respondent-Department pursuanl to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. 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 objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands 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{ime measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substrtuted provisions, and this Cou( allowing the petitions only on the procedural flaw, the right \ i1 t7 conferred on the Revenue Proceed further if they so wa order of the Supreme Cou uld remain reserved to t from the stage of the in the case of Ashish Agarwal, supra.

18. We would only further like to make observations that since we are inclined to dispose of the inst t writ petition, conscious of the lact that the earlier order of th s High Court in the case of Kanakala Ravindra Reddy (l sup ) is subjected to challenge before the Hon'ble Supreme Cou in SLP No.3574 of 2024, \ \ preferred by the Income Tax Depart ent, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Reven e against the decision of this High Court in the case of Kanak Ravindra Reddy (l supra). ( ( This, in other words, would mean th t either of the parties, if they so want, may move an appropriate p tition seeking revival of this writ petition in the light of the deci ion of the Hon'ble Supreme Court in the pending SLP on the very ame lssue. ? t

19. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as he issue of jurisdiction rs concemed. As a consequence, e impugned notice under challenge under Sections 148-A and 48 stands set aside/quashed. 1 \ 18 The consequentiaI orders, if any, also stand set aside/quashed in similar terms as have been passed by this High Court in the case of Kankanala Ravindra Reddy (l supra). There shafl be no order as to costs Consequently, miscellaneous petitions pending. il.any, shall stand closed. A //TRUE COPY' A LAXMI- GISTRAR OFFICER The Assistant Commissioner of income tax, Circle s1)j,/nyoeraoao rr TOWER, AC Guards, tVtasab Tank, Hyderabad, Tednijaria, 500084 The Principal Clief Commissioner, of lncome Tax -Telangana and A.p, flyderabad, lT Towers, AC Guards, Masab Tank, Hydera"bad SOb O2g, Telangana. / The chairman central Board of Direct Taxes, Represented by its chairman, Department of Revenue, Mr1lstry of Finance. Government of india, secreiaiiat Buildings, New Dethi - 't'10 OO I. The National Faceless Assessment Center, lncome Tax Department, New Delhi. ' -the Government, Department of Revenue. IVlinistry of The Secretary to Frnance. Union of lndia New Delhi -.1 10 001. One CC to SRI THANNERU CHA|TANYA KUMAR Advocate [OPUC] _O_ry CC to Ms BOKARO SAPNA REDDY (Jr SC FOR TNCOME TAX) loPUCl One Cc To Sri B.Mukheriee Advocate , Two CD Copies w I I To, 2 2 4 E b 7 o o KKS BS HIGH COURT / DATED:2810412025 /c- !) 1l rR Sl.ri C. (' 13 AUE 2M i;l -,.t .,/ ./,, .7' ORDER WP.No.26306 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS B a^