Akhilesh D Sood HUF, (R v. consequently quashing the (iii) lmpugned order dated 07.03.2o24bearing DIN

Petition uncler Section 15'l cPC praying that in the circurrstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspendallfurtherproceedingspUrSuanttothe(i)lmpugtnedorderdated 07.03.2O24bearing DIN and Notice No. ITBA/AST/5114712023- 1t411062152631(1) for the Assessment Year 2018 - 2019, issued by the Respondents under section 147 read with Section 1448 of the lncome Tax Act, 1961 and (ii) lmpugned Notices dated 07.03 2024, 05.O8.2024,26.O8.2024 and 18.09.2024 issued under Section 274 reac, with section 270A and under Section 270Ah in the interest of justice IAN O:3 OF 2024 Petition under section 151 cPC praying that in the circurrstances stated in the affidavit filed in support of the petition, the High court may be pleased to stay the operation of (i) lmpugned order dated 07 .o3.2o24bearing DIN and Notice No. ITBA/AST/S/14712023- 2411062152631 (1)for the Assessment'/ear 2018 - 2019, issued by the Respondents under section 147 read with Section 1448 of the Income Tax Act, 1961 and (ii) lmpugned Notices dated 07.03.2024,05.08.2024, 26 08'2024 and 18.09.2024 issued under section 274 rcadwith Section 27oA and under Section 27OAA, in the interest of justice Counset for the petitioner: SRI. SHEETAL SRIKANTH REp SRI MYTRI INDUKURU Counsel for the Respondent Nos. i,2&4: SRI GADI PRAVEEN KUMAR Dy. SoLtCtToR GEN. oF INDIA counsel for the Respondent No.3: rvls.B sApNA,ftEBr*"d The Court made the following: ORDER TAx DE'ARTMENT :) t THE HONOTIRABLE SRt JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA W.P.No. 2678s oF 2024 ORDER, (pcr llott'ble Sri Ju'stice P Sam Koshy) Heard Mr. Sheetal Srikanth, learned counsel repl esenting Ms. Mytri Indukum, learned counsel for the petitic'ner and Ms. B.Sapna Reddy, ieamed Junior Standing Counst:l for the Income Tax Department for respondent No 3 ' Perused the record'

2. This is a writ petition where the proceedings e're either challenged lo the notices which were issued under SectLon 148,4. andl4SoftheIncomeTaxAct,lg6l(forshort'theAct')orthe assessment orders those have been passed under Section 147 of the Act which have been assailed'

3. This writ petition is being taken up today only on cne of the grounds, that the notices issued under Section 148A c'f the Act and the subsequent initiation of proceedings under Sectron 148 of the Act by the jurisdictional Assessing Officer' whereas in terms of the amendment that was brought to the Income Tax A.ct by way of Finance Act, 2O2l w'e'f', 01'04'2021 onwards' p'oceedings 2 'lr under Section l48A of the 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 is that the issue of proceedings being in violation of the Finance Act, 2021 i.e., the impugned notices under Section l4gA and Section l4g 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 r4gA as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground ofit being in violation ofthe provisions ofSection l5lA of the Act read with Notification IS/ZOZ2 dated29.03.2022. The said judgment passed by this court has also been subsequently followed in a large number of writ petitions which were allowed on similar terms. 'l(2023) I56 taxmann.com l7g (Telangana)l I 't ) 3

5. Down the line, we find that the same issue has also been decided against the Revenue by various High Courts i'e'' by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD', vs' ASSISTANT COMMISSIONER OF INCOME TAX & OTIIERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs' UNION OF INDIAT' P'rnjab and Haryana High Courl in the case of JATINDER SINGII BANGU vs. UNION OF IND[A4, and Telangana High Court in the case of SRI VBNKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of intemational taxation, Bombay High Court in r'he case of ABHTN ANILKUMAR SHAH VS. INCOME TAX CIFFICER' INTERNATIONAL TAXATION6 which is again on international taxation and central circle, High Court of I{imachal Pra'lesh in the case of GOVIND SINGII vs' TNCOME TAX OFFICERT' Gujarat !{igh Court in the case of MANSTIKHBHAI 'lzoz+1464 ITR 430 (Bom) 'itznzil I56 taxmann'com 478 (Gauhati)l "iizozql i65 taxmann.com 115 (Punjab & Haryana)l ' 12024) 167 taxmann.com 41 1 (Telangana)l " 12024) 166 taxmann.corn 679 (Bombayl - 'iioiqi 165 tu*rrrun t..om 113 (Himachal Pradesh)l 4 DAHYABTIAI RADADIYA vs. INCoME TAx OFFICER, WARD 3(3X5)8, Jharkand High Court in the case of SIfyAM 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 10 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 of Hexaware Technologies Ltd., (2 supra) as also the one which has been decided by this Court in the case of Kanakala Ravindra Reddy t2024 SCC Online Guj 4012 '2025 SCC Online Jhar287 'o 12023 : RI-JD :4984-DBl ( , l l 5 (1 supra) has been subjected to challenge in a SpeciiLi Leave Petition i.e., SLP No.3574 of 2024 before the Hon'ble Supreme Court and the Hon'ble Supreme Courl is seized of tho matter' In addition, there are about 1200 SLPs also fi1ed arising c'ut ofthe same issue being decided by various High Coutts' To a query being put to the learned counsel for the Revenue' 't . they have categorically accepted the fact that there is rlo interim order granted by the Hon'ble Supreme Court in an1' of these matters pending before it' Meanwhile' fresh writ petitions of identicai nature are being piled up before this Bench on clai1y basis and the pendency is getting increased on matter which otherwise has already been clealt and decided by this very High Corrrt itself'

8. On the one hand, even though the order of this Court that was passed as early as on 14'09'2023 and more 16 tronths have Iapsed, till date, we do not find any remedial steps hziving been taken by the Income Tax Department to take appropriate steps to either hold back issuance of notice under Section l48ll and under Section 148 of the Act by the jurisdictional Assessing Ofhcer' rather the authorities concemed in the teeth of series 'rf decisions ( 6 by all the major High Courts in India are continuously still initiating proceedings under Section 14gA of the Act and also initiating proceedings under Section l4g 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 2O2l .

9. Upon a query being put as to why can,t this wnt petition be disposed of in the teeth of the decision rendered by this Court in the case of Kunakqla Rqvindra Reddy (l supra), leamed Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to flle equal number of SLps before the Hon'ble Supreme Court and it would be further burdening the exchequer of the Union of India. It was also the contention of 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 firnlization of the SLps pending before the Hon,ble Supreme Court and the fact that the petitioner is already enjoying the beneht of interim protection. Nonetheless, on the earlier query of this Court as to why the Income Tax Department have not come out with a mechanism to issue appropriate instructions or to take 7 ing that proceedings under Section 148.4 approPriate steps 1n ensun of the Act as also the assessment orders under Section I '18 of the Act are kept in a hold in the light ofthe decisions dedcid':d by the various High Courts, it was submitted by the leamed Standing Counsel that the said steps can only be taken at the level of CBDT as any such steps would have to be taken Pan India and ';annot be limited to any of these jurisdictional High Courts' l0.Asaresultol.which,whatwearefacingissteepLtrcreaseof Iitigation day in and day out even though various orders have been passed by this High Court allowing writ petitions on the very same issue. The Income 'l'ax authorities concemed are stil1 even now in 2025 also initiating proceedings in contravention to the provisions of Section 151A of the Act and as aresult by now' more than 600 to 700 petitions have been already got piled up before this High Court on an issue which otherwise stands squarely covt:red by the judgment of this Court in the case of Kanakala Ravindra Reddy (1 supra). What is also surprising is the fact that th'rugh while allowing the writ petitions in the case of Kanakatt't Ravindta Reddy (l supra), the Division Bench while reserving he right of the Revenue, has also protected the interest of thr: petitioners 8 insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictry in accordance with the amended provisions of the Act, as amended by the Financ e Act, 2020 and the Finance Act,202I. The petitioner assessee would be entitled to challenge or raise the other legal 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 contrary, they have been stilr sticking on to the stand, which this High Court as well as many other High Courls already held to be bad.

11. It appears that because ofthe 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 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 for 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 SLps are still pending, the Income Tax ( I 9 Department would get the advantage of the liberty that is c'therwise protected in favour of the Revenue for initiation of fresh proceedings liom the disposal of these matters at a much.lilter stage which would be advantageous and beneficial to the Re''renue and would be eqr.rally disadvantageous and detrimental so far a.s interest of the assesses are concerned' As a consequence' the Inc:ome Tax Department gets an extended period of time for initiatic'rt of fresh proceedings.

12. The alarming trend of docket explosion in this Court' despite the clear precedenr set in Kunakala Ravindru Reddy (1 supra), is a matter of grave concern. The Income Tax Department's persistent initiationoffreshproceedings,disregardingtheestablishr:djudicial pronouncements, has led to an unprecedented surge in litigation with over 600-700 petitions piling up on the same ir;sue This deliberate approach not only undermines the principle of judicial precedent but also strains the judicial resources unneces sarily' The Department's strategy of awaiting the Supreme Court's clecision on pending SLPs while continuing to initiate fresh proceedings appears to be a calculated move to buy time and ':ircumvent limitation periods, rather than adhering to the establjshed legal t\ ,'iJ l I i 10 position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncements, particularly when this Court has already provided a balanced approach by preserving both the Revenue,s rights and assesses lnterests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Deparlment itself and should have found out via media in ensuring that proceedings under Sections 148-4. and l4g should not have been issued in a faceless manner, at least till the Hon'bre Supreme court decide the twelve hundred (1200) odd SLps which it is already seized ofor, at least the Income Tax Department should have fbund out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections l4g-A and 14g, 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 for the fact that such a decision if at alr 11 has to be taken, has to be taken for the whole of India' and which otherwise has to be by way of a policy decision and that too at the level of Central Board of Direct Taxes' Though the' leamed Standing Counsel for the Income Tax Department conterrded that the Delhi High Courl dismissed a writ petition of similar rlature' on theonehandwhentheHighCourtisstrugglingtoreduceits pendency, such notices which are under challenge in this writ petition are forcrng the assessee to knock the doors of this High Court resulting in filing of hundreds of new writ petitiorLsi which in the long run not only affects the disposal of the writ prr.itions but also consutnes substantial time of the Bench in hear-ing these matters again and again on daily basis Admittedly' in spite of the matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Supreme Court which is s':Lzed of the matter has been reluctant in granting any interim protection to the Income Ta{ Department Yet, the authorities concerned at the State level are not ready to accept the verdict passed b'r a majority of High Courts of different States on the same issue; and to make things further rvorse, the Income Tax Department is showing audacity bf issuing notices continuously under Sections 148-A and .,, . r1&;'l'r:titatl ;n43 L2 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner

14. In rhe case of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAX1r, on an issue whether it was justifiable 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 righfly 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. lTOi3 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 Court. ij !tr^q{,. tr-o qmann.com a22 (Bombay)l '' fl978J I I3 ITR 589 (Bombay) t,'. 1202 41 I 65 taxmann. com 5 g I /3 00 T axman 4 52(Bombay) 1l9921taxmann.com I 6/ 5 5 ELT433 (SC) a t l 13 that the fides in is perhaps right in saYng not actuated bY any mala impugned orders. TheY "6. Sri Reddy officers were perhaps passing the 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 is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual malafides but with the fact that the officers' in reachingl in their conclusion, by-passed two appellate orders in regard to the same issue which were placed befortr them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view' rightl'7 criticized this conduct of the Assistant Collectors and the harassment to the assessee caused by the failurr: of these officers to give effect to the orders c'f authorities higher to them in the appellate hierarchy lt cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasiludicial issues before them, revenue officers are bound by the decisions of the appellate authorities The order of the Appellte Collector is binding on th€' Assistant Collectors working within his jurisdiction anc' the order of the Tribunal is binding upon the Assistarl Collectors and the Appellate Collectors who functiort under the iurisdiction of the Tribunal The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreserveoly' by the subordinate authorities The mere fact that th'-' order of the appellate authority is not "acceptable" tl the department - in itself an obiectionable phrase - and is the sub.iect matter of an appeal can furnish 13 ground for not following it unless its operation has been suspended by a competent court lf this healthy 1,4 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 apparenfly 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 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 f-act 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,202l' Now' in order r'o protect the interest of the Itevenue as also that of the assessee' it would be trite at this juncture, if we dispose of the writ petitior' with an o6r"*alionidirection that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in lhe case of Kankanala Ravindra Reddy (l supra) shall however be subject to the outcome of the SLPs which were tiled by the Inr:orne Tax Deparlment ancl which is pending consideration before the Hon'ble Supreme Coutt.

16. In the given tacts and circumstances' this Benclr is of the considered opinion that uniess and until we do not titt'tly dispose are squarely covered by the decision c'l'this Court of matters ',vhich and which stands fortihed by the decisions of the vrrrious other High Courls on the very same issue' the pendency ol- this High Court woulcl further be burdened which otherwise carL be decided and disposed of as a covered matter' 17 . So lar as the interest of the Revenue is concemerl' we are of the considered opinion that the interest of the Revenur: has already been considered and protected, as has been observed ir. paragraphs 16 36,37 arfi 38 of the 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 pursuant to the notices issued under Section 147 and 14g would atso 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 supra, as a one{ime measure of Ashish exercising the powers under Article 142 of the Constitution of lndia, permifted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to 17 proceed further if they so want from the stage of the order of the Supreme Court in the case of Asllsh Aqanval, suPra.

18. We u'ould only fufiher like to make observations that since we are inciined to dispose of the instant writ petition' crlnscious of the fact that the earlier order of this High Court in lhe case of Kanakala Ravtndra Reddy (l supra) is subjected to challenge before the I{on'b1e Supreme Court in SLP No'3574 of 2024' preferred by the Income Tax Department, we make it clear that allowing ol the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Revenue against the deci:;ion of this High Coutt in the case of Kanakala Ravindra Redd-u (1 supra)' This, in other words, would mean that either of the pa'':1ies' if they so want, may move an appropriate petition seeking revival of this writ petition in the light of the decision of the Hon'ble Supreme Court in the pending SLP on the very same issue'

19. Accoldingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurLsdiction is concerned. As a consequence, the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed' { I \ 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 Kankunalq Ravindra Redtly (l supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY// SD/. A.H. S S;f,?ITt'8,tY[f[ To, SECTION OFFICER 1 . The Secreta ry, Union of lndia A/inistry of Finan lncome Tax Department, New De thi - 100 011 2. The Office of Commission er, lncome Tax Department, Ministry of Finance, Government of India New Delhi - i00 0i 3. Office of the I ncome Tax Officer, Ward 10(1), Hyderabad, tT Towers, AC Guard, Masab Tank, Hyder abad - 500 004 4. The Nationat Faceless Ass essment Center lncome Tax De of Finance , Government o lndia , New Delh partment, IVlinistry 5. One CC to SRI. MYTRI I NDUK URU, Advocate [OPUC 6. One CC to tMs. B. SApNA REDDY, Jr. SC FOR INCO ME TAX DEPARTM ENT [OPUcl 7. One CC to SRI. GADI INDIA Advocate B. Two CD Copies Bt\/ o GJ PRAVEEN KU MAR,Dy. SOL|C|TOR GEN. oF loPUcl .100

011. l ,f I 0 HIGH COURT DATED:2410412025 ORDER WP.No.26785 of 2024 oR Ir{t: 5 l4 ( c (J t t 10 ,JtrL 2$6 c) * b... HI-, ALLOWING THE WRIT PETITION WITHOUT COSTS ,{