SAIMPATHKUMAR NOOKA v. The lncome Tax Officer Ward 2

Petition under Article 226 ot lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of [\,4andamus, declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre) completed the assessment UIS 147 r.w-s 144 read with section 1448 of the lncome{ax Act Date of Order 1B|O3/2O24. DlN. ITBA/AST lsl14712023- 2411062801961(1) for the Assessment Year 2015-16 determining the total income of Rs- 5.12.162/- as arbitrary, illegal, bad in {aw. without jurisdiction, void-ab-initio, violative of the principles of natural .justice apart from being violative of Articles 14, 19(1)(g) and 265 of the Constitution of lndia and Sec. 14BA of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice Counsel for the Petitioner: SRl. THANNERU CHAITANYA KUMAR , Counsel for the Respondent Nos.1 to 4: Ms. J SUNITHA (JUNIOR SC FOR TNCOME TAX) Counsel for the Respondent NO.S: SRI GADI PRAVEEN KUMAR DEPUTY SOLICITOR GENERAL OF INIDA The Court made the following: ORDER TIIE HONOURABLE SRI JUSTTCE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSTNG RAO NANDIKONDA WRIT PETITION No.26973 of 2024 ORDER: (per Hon'ble Sri Justice P.Sam Koshy) Heard Mr. T.Chaitanya Kumar, leamed counsel for the petitioner and Ms.J.Sunitha, Ieamed Junior Standing Counsel for the Income Tax Department for the respondents. Perused the record.

2. This is a writ petition where the proceedings are either challenged to the notices which r'r,ere issued under Section 148,4' and 148 of the lncome Tax Act. 196 I (for short'the Act') orthe assessment orders those have becn passed under Section 147 of the Act which have been assailed.

3. This writ petition is bcing taken up today only on one of the grounds, that the notices issued under Section l48A of the Act and the subsequent initiation ol proceedings under Section 148 of the Act by the jurisdictional Assessing Officer, whereas in terms of the amendment that rvas brought to the lncome Tax Act by way of Finance Act, 2021 w.e.f.. 01.0.1.202 I onwards, proceedings 2 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 vioration of the Finance Act,202t i.e.. rhe impugned notices under Section l4gA and Section t4g of the 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 decicted on 14.09.2023 whereby a batch of writ petitions were a[[or.r.ed and the proceedings initiated under Section l4gA as also trnder Secrion 148 of the Act were held to be bad with consequential re lief.s on rhe ground of it being in violation of the provisions of Seuion I 5 l.{ of thc Act read with Notification lgl2)z2dated 29.0i.2012. The said judgr.ent passed by this court has also been subsequentlv ibllorred in a large number of writ petitions which rvere a[ou,ed on :;i,riiar te rn'ls 'l(l{)2;1 I-i6 raxmann.com l7g (Telangana)l J

5. Down the line, we find that the same issue has also been decided against the Revenue by various High Cours i.e., by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., VS. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA3, Punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA4, and Telangana Fligh Court in the case of SRI VENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of intemational taxation, Bombay High Court in the case of ABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICER' INTERNATIONAL TAXATION6 r'vhictr is again on international taxation and central circle, High Court of [ linrachal Pradesh in the case of GOVIND SINGH vs. INCOVIE TAX OFFICERT, Gujarat High Courl in the case ol MANSUKHBHAI ' lzoz+1464 ITR 430 (Bom) 'l(2024) 156 taxmann.com 478 (Gauhati)l ^ l(2024) 165 taxmann.com I t5 (['unjab & Itary ana) l '[2024) 167 taxmann.com 4tl (T'elangana)] " 12024) 166 taxmann.com 679 (Bombay)l ' [2024) 165 taxmann.com [ [3 (Hirnachal Pradesh)l 4 DAHYABHAI RADADIYA vs. INCOME t.AX OFFICER, WARD 3(3X5)8, Jharkand High Court in rhe case of SHyAM SUNDAR SAW vs. TINION OF II\DIAe, Rajasthan High Court in the case of SHARDA DEVI CHHAJER 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 ol 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 ol t{igh Courls, we are still confronted with large filing ot. identica[ rnatters on daily basis ranging between 5 to I 0 rvrit petitions. That upon the instructions being sought frorr the Department, they have been taking a solitary ground that the decision o[- the Bombay High Court in the case of Herttttttc Technologies Lrd., (2 supra) as also the one which has bcerr decided by this Courl in the case of Kanakala Ravindra Reddr 8202+ SCC Ont.inc Gui 4012 '2025 SCC On[.inc Jhar 2g7 'o 72023, RJ-.rD:.t98 4-DB I 5 (l supra) has been subjected to challenge in a Specia[ Leave Petition i.e., SLP No.3574 of 2024 before the Hon'ble Supreme Court and the Hon'ble Supreme Court is seized of the matter. In addition, there are about 1200 SLPs also filed arising out ofthe same issue being decided by various High Courts.

7. To a query being put to the learned counsel lor the Revenue, they have categorically accepted the fact that there is no interim order granted by the Hon'ble Supreme Court in any o[ these rnatters pending before it. Meanwhile, fresh writ petitions of identical nature are being piled up before this Bench on daily basis and the pendency is getting increased on matter which otherwise has already been dealt and decided by this very High Courr itself' 8 On the one hand, even though the orcier of this Court that rvas passed as early as on 14.09.2023 and more 16 rllonths have lapsed, till date, we do not find any remedial steps havirlg been taken by the Income Tax Department to take appropriate steps to cither hotd back issuance of notice under Section t48A and under Section 148 of the Act by the jurisdictional Assessing Ofllcer, rather the authorities concemed in the teeth ol selies of decisions 6 by alt the major High Courts ln India are continuously stil I rnrtratlng proceedings under Section l4gA of the Act and also initiating proceedings under Section r 4g of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Act2Oll.

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), leamed Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to file equal number of SLps before the Hon'ble Suprerre Courl and it would be further burdening the exchequer of the tJnion ol India. It was also the contention ol the learned 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 ol the SLps pending before the Hon,ble Suprerne Court and the fbct that the petitioner is already enjoying the benefit of inter-int protection. Nonetheless, on the earlier query olthis Court as to rvhy the [ncorne Tax Department have not coule out with a rncchanisrrr to issue appropriate instructions or. lo lake 7 appropriate steps in ensuring that proceedings under Section l4BA of the Act as also the assessment orders under Section 148 of the Act are kept in a hold in the light of the decisions dedcided 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 cannot be timited to any of these jurisdictional High Courts.

10. As a result of which, what we are facing is steep increase ol titigation day in and day out even though various orders have been passed by this High Coun allowing writ petitions on the very same issue. The Income Tax authorities concemed are still even now in 2015 also initiating proceedings in contravention to the provisions ol' Section t 5l A of the Act and as a result by now, more than 60t) to 700 petitions have been already got piled up belore this I ligh Court on an issue which otherwise stands squarely covered by the judgnrent of this Court in the case of Kanakalu Rtvindra Redd.l' (l supra). What is also surprising is the fact that though while allorvir.rg tlre writ petitions in the case of Kanakah Rttvintlrn Redtty (t supra), the Division Bench while reserving the right ol the Revcnue, has also protected the interest ol the petitioners 8 insofar as the libefty which was granted to the Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Financ e Act, 2020 and, the Finance Act, 2021 . The petitioner assessee would be entitled to challenge or raise the othe' regal 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 still sticking on to the stand, which this High Court as well as many other High Courts already held to be I 1. It appears rhat because ol rhe aforesaid liberty that this High Court had granted permitting thc Revenue for initiating fresh proceedings as a one-time ,reasure in a faceless manner, the Income Tax Deparlment wants to take advantage of the same by protracting these proceedings rvhich u,ould enable them to meet the limitation that would otlrcrrr isc coine 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 [{on,ble Supreme Court confirms the decision taken by this High Couft as also by the other High Courts in rvhich the SLps are stiil pending, the Income Tax 9 Depaftment would get the advantage of the liberty that is otherwise protected in favour of the Revenue for initiation of fresh proceedings from the disposal of these matters at a much later stage ivhich would be advantageous and beneficial to the Revenue and would be equally disadvantageous and detrimental so far as interest of the assesses are concemed. As a consequence' the Income Tax Department gets an extended period of time for initiation of fresh proceedings.

12. The alarming trend of docket explosion in this Court, despite the clear precedent set in Kanukala Ravindra Reddy (l supra), is a rnatter of grave concern. The Income Tax Department's persistent initiation of tiesh proceedings, disregarding the established judicial pronoLrncernents, has led to an unprecedented surge in titigation with over 600-700 petitions piling up on the same issue. This delibcrate approach not only undermines the principle of judiciat precedent but also strains the judicial resources unnecessarily. The Department's strategy of awaiting the Supreme Court's decision on pending SLPs white continuing to initiate fresh proceedings appears to be a calculated move to buy time and circutnvent lirnitation periods, rather than adhering to the established legal 10 posrtion. 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 interests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Incorne Tax Department itself and should have found out via media in ensuring that proceedings under Sections l4g-A and l4g should not have been issued in a faceless manner, at least tiil the Hon,ble Supreme Court decide the twelve hundred (1200) odd SLps rvhich it is already seized ofor, at least the Income Tax f)sp2r1p1ent should have found out some remedial steps to ensure that u,,herever the authorities intend to initiate proceedings under Sections l4g_A and t4g, other than in a faceless manner, the proceedings should lrave been deferred without precipitating thc rnattcr fur1her intirnating the assessee that they shall initiate appropriate proceedings only after the SLp,s are decided by the Hon,ble Supreme Couft on the vcry same issue. This again, the Incon-re Tax Department, lras not been able to girze a convincing reply, except lor the thct that such a decision if at all 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 contended that the Delhi High Court dismissed a writ petition of similar nature, on the one hand when the High Court is struggling to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this High Court resulting in filing of hundreds of new writ petitions which in the tong run not only affects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daity basis. Admittedly, in spite of the matter before the l{on'ble Supreme Court having been taken on many occasions, the Hon'ble Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the Income Tax Deparlrnent. Yet, the authorities concerned at the State level are not ready to accept the verdict passed by a majority of High Coufis of diflercnt States on the same issue; and to make things lurther worse, the I ncome Tax Department is showing audacity by issuing notices continuously under Sections 148-A and 12 148 through the jurisdictional Assessing Olficer u,hereas it ought to have been only in the faceless manner

14. In the case of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXn, on an issue whether ir was justifiable on the part of the [ncome 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. lTOr3 of which one of us (Justice G.s. Kurkarni) 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 loose its binding force. Referring to the decision of the Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.,o, 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. ',i!?^o?tl170 raxmann.com 422 rBornhal )l ',' lr1978) I I 3 ITR 589 ( tsombar ) " [2024] 165 taxmann.com 5g l/300 .[.axman .1 ll.l (sc) 'o 1t9921taxmann.com I6255 1:1 452 (Bornba_v) 13 "6. Sri Reddy is perhaps right in saying that the officers were nol actuated by any mala fades 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 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 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, in our view, rightly criticized 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 hierarchy. lt cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasijudicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellte Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tnbunal is binding upon the Assistant Collectors and the Appellate Coltectors who function under the .jurisdiction of the Tribunal. The principles of ludicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authonties The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless rts operation has been suspended by a competent court. lf this healthy 14 rule is not followed, the result will onty be undue harassment to assesses and chaos in administration of tax laws. 12 We have dealt with this aspect at some iength, 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 onlll 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 wouid 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 lhe utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of Judrcial 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 Bencrr rno.e is the t-act that an endeavour is being made whole heartedty to ensure not to gcnerate further litigation on issues which have been laid to rest b), a large number of High Courts all of whom have taken a consistcnt stand that the action of the Income Tax Depaftrnent being violatir,.e o{- thc 15 Finance Hct,2020 and Finance Act,202l' Now' in order to protect the interest of the Revenue as also that of the assessee' it would be trite at this juncture, if we dispose of the writ petition with an observatior/direction that the disposal ol the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Reddy (l supra) shall however be subject to the outcome of the SLPs which were filed by the lncome Tax Department and which is pending consideration before the Hon'ble Supreme Court.

16. In the given facts and circumstances' this Bench is of the considered opinion that unless and until we do not timely dispose of matters which are squarely covered by ttre decision of this Court and which stands fortified by the decisions of the various other High Courts on the vely same issue, the pendency of this High Court would further be burdened rvhich otherwise can be decided and disposed of as a covered tnatter'

17. So far as the interest of the Revenue is concemed' we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs 16 36,37 and,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 l Procedure adopted being per se illegal, deserves .othe be and are accordingry set aside/quashed. As a cons "o'"n""' all the impugned orders getting quashed, ,n" by the re spo nd" n"o"o, *, lll ;T,.",:t: :";: : il ::: issued under Section 147 and 14g 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 sut )sequent orders also gets nurified automaticary.

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 end orders are getting quashed on the pornt of jurisdiction, we are not inclined to proceed fr.rrther. and decide the other issues raised by the petitioner whrch stands reserved to be raised and contended rn 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, permifted the Revenue to proceed under the substituted provisic the petitions onry on ,r" ,l:]llJifi#"il: t7 conferred on the Revenue would remain 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 further like to make observations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy (l supra) 1S subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 ol 2024, pre[erred by the Income Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of the afloresaid SLP preferred by the Revenue against the decision of this High Court in the case of Kantkala Ravindra Relr/1' (l supra). -l'his, in other words, would mean that eitl.rer of the parties, i[' they so want, may move an appropriate petition seeking revival of this writ petition in the light of the decision of the Hon'ble Supretne Courl in the pending SLP on the very satne issue.

19. Accordingly, the instant writ petition stands allowed in tavour o[' the assessee so [ar as the issue ol jLrrisdiction ts concerned. As a consequence, the impugned notice undcr challenge under Sections 148-A and 148 stands sct asidc/quaslied 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 Kankanala Ravindra Reddy (l supra). There shaU be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed- //TRUE COPY// SD/. B. REKHA RANI ASSISTANT REGiSTRAR Sr" SEC FFICER The Income Tax Officei- Ward 2, Karimnagar, lncome Tax Office. Aavakerr Bhavan, Near Natraj Theatre, Karimnagir"ied;s;;; sili"-"'*' ' \q,q^q' T.he Principal Chief Commissioner-of lncome Tax, Telangana and A.p Hyderabad lT Towers AC Guards Masab Tank HVO"r"UaO The Chairman Central Board of Direct Taxes, Department of Revenue Ministry of Finance Government or tnoia seJie-ta-iaf'Euirdings New Derhi Ihe National Faceless Assessment Center, lncome Tax Department New Delhi. T.he s-ecretary to the Government Department of Revenue Ailinistry of Finance New Delhi One CC to SRt, THANNERU CHAITANYA KUtuAR Advocare tOpUCl one cc to sri Gadi Praveen Kumar, Deputy soricitor Generar of rndia topucl 9^lg C^9 to Ms J SUNTTHA (JUN|OR SC FOR |NCO|VE TA.X) Advocate loPUCl To, I ) 3 4 6 7 8 Two CD Copies

9. KKS GJP ('Y HIGH COURT DATED:01 10512025 I /4\ ':!\, ' )l ^',. 1O SEP zffi ORDER WP.No.26973 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS \\ LLt'.' (r. )r,t.'-r -l-(' \'-