BikshapathiNiggula v. '1 . lncome Tax Officer Ward 1, Warang

petitioner and Ms. B.Sapna Reddy, learned Junior Standing Counsel for the Income Tax Dep ent for the respondents Perused the record.

2. This is a writ petition where the proceedings are either challenged to the notices which were issued under Section 148A and t48 of the Income Tax Act, 1961 (for short 'the Act') or the assessment orders those have been pAssed under Section 147 of ,I the Act which have been assailed.

3. This writ petition is being taken up today only on one of the grounds, that the notices issued unde[ Section 148,4. of the Act I and the subsequent initiation of proce(dings under Section 148 of the Act by the jurisdictional Assessin Officer, whereas in terms $ of the amendment that was brought to fhe Income Tax Act by way of lrinance Act, 2021 w.e.f., 01.04 4 1 021 onwards, proceedings 2 i \-i\1 \ under Section 148.4 ofthe 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 Financ e Acl, 2021 i.e., the impugned notices under Section 148.4 and Section 148 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 148A 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 1 5 1A of the Act read with Notification 18/2022 dated29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allorved on similar terms. '[(2023) 156 taxmann.com 178 (Telangana)] I ( 3

5. Down the line, we find that the same issue has also been decided against the Revenue by vanous High Courts i.e., by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. AS ISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA3, Punjab and I Iaryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF lNDlA4, and Telan$ana High Court in the case of SRI VENKATARAMANA REDD PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME iIAXs where the issue was in respect of intemational taxation, eoq[bay High Court in the case of ABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION6 {"ni"n i, again on intemational taxation and central circle, High CoJrt of Himachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICERT, Gujarat High Court in the (ur" of MANSUKHBHAI I ' 7zoz11464 ITR 430 (Bom) '[(2024) 156 taxmann.com 478 (Gauhati)] ^ l(2024) 165 taxmann.com I I 5 (Punjab '12024) [67 taxmann.com 4ll (Telangai " 12024) 166 taxmann.com 679 tBombay] ' 120241 165 taxmann.com I l3 (l Iimach4 & Haryana)l na)l )l rl Pradesh)l 4 DAHYABHAI RADADIYA VS. INCOME TAX OFFICE,R' WARD 3(3)(5)8, Jharkand I{igh Court in the case of SHYAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Courl in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch ol 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 I 0 writ petitions. That upon the instructions being sougl.rt from the Department, they have been taking a Solitary ground that the decision of the Bombay High Court in the case of Hexawore Technologies Lld., (2 supra) as also the one which has been decided by this Court in the case of Kanakala Ravindra Reddy 82024 SCC Online Guj 4012 '2025 SCC Online lhar 28'7 12023, RJ -JD : 49 84-DB l o ' ( J 5 (1 supra) has been subjected to hallenge in a Special Leave 4 Petition i.e., SLP No.3574 of 2024 before the Hon'ble Supreme Court and the Hon'ble Supreme C lourt is seized of the matter. ln addition, there are about 1200 SLr ps also filed arising out of the same issue being decided by various Courts.

7. To a query being put to the lea [ned counsel for the Revenue, they have categorically accepted the fact that there is no interim order granted by the Hon'ble Sup m Courl in any of these matters pending before It. M \ih e fresh writ petitions of L identical nature are being pited up beflore this Bench on daily basis and the pendency is getting increase]d on matter which otherwise i has already been dealt and decided by] this very High Court itself. I

8. On the one hand, even thougl the order of this Court that was passed as early as on 14.09.20213 and more 16 months have lapsed, till date, we do not. trnd any remedial steps having been taken by the Income Tax DeoartmenI 'l to take appropriate steps to either hold back issuance of notice der Section 148A and under Section 148 of the Act by the juri dictional Assessing Officer, rather the authorities concemed in th teeth of series of decisions F 6 by all the major High Courts in India are continuously still 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 Acr,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 (1 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 hle equal number of SLPs before the Hon'ble Supreme Court and it rvould 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 finalization 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 Income Tax Department have not come out with a mechanism to issue appropriate instructiot-ts or to take - appropriate steps in ensuring that prQceedings under Section 148A of the Act as also the assessment oriders under Section 148 of the Act are kept in a hold in the light o the decisions decided by the I I various High Courts, it was submi ed 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 en 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 thc ugh various orders have been passed by this High Court allowing vl,rit petitions on the very same issue. The Income Tax authorities c ncemed are still even now in q 2025 also initiating proceedings in c ntravention to the provisions of Section 151A 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 Kanukala Ravindra Reddy ( 1 supra). What is also surprising s the fact that though while allowing the writ petitions in the ase of Kunakala Ravindra Reddy (1 supra), the Division Benc while reserwing the right of the Revenue, has also protected th p 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,2021. 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 libefty that was resenred for the Revenue' On the contrary, they have been still sticking on to the stand' which this High Coutt as well as many other High Courts alrcady held to be bad. i 1. lt appears that because ofthe aforesaid liberty that this High Coun 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' I-ikewise' 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 CourtsinwhichtheSLPsarestillpending,thelncomeTax 9 Department would get the advantag! of the riberty that is otherwise protected in favour of the for initiation of fresh Rev proceedings from the disposal o f the matters at a much later stage $e I which would be advantageous and I DC neficial to the Revenue and would be equally disadvantageous an]d detrimental so far as interest of the assesses are concemed. As a po nsequence, the Income Tax Department gets an extended period of time for initiation of fresh proceedings.

12. The alarming trend of docket elrplosion in this Court, despite the clear precedent set in Kanakula Aavindra Reddy (1 supra), is a matter of grave concem. The Incomd Tax Department's persistent initiation of fresh proceedings, disregi rding the established judicial pronouncements, has led to an unpr! Dcedented surge in litigation with over 600-700 peritions piling q pp on the same issue. This deliberate approach not only ,nd".*l nes the principle of judicial precedent but also slrains rhe judicial resources unnecessarily. The ] Deparlment's strategy of, awaiting f he I Supreme Court's decision on pending SLPs while continuing to initiate fresh proceedings appears to be a calculated move to buy time and circumvent limitation periods, rather than adheri ng to the established legal 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 Deparlrnent 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 till the Hon'ble Supreme Court decide the twelve hundred (1200) odd SLPs which it is already seized ofor, at least the Income Tax Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manrer, the proceedings should have been defened 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 all 11 has to be taken, has to be taken for tfre whole of India, and which otherwise has to be by way of a poli(V decision and that too at the level of Central Board of Direct Taxes. Though the leamed Standing Counsel for the Income Taf Department contended that the Delhi High Court dismissed a writipetition of similar nature, on the one hand when the High Court is struggling to reduce its pendency, such notices which are r]nder chailenge in this writ petition are forcing the assessee to klrock the doors of this High I Court resulting in filing of hundreds o new writ petitions which in f the I ong mn not only affects the disp(sal of the writ petitions but also consumes substantial time of tilre Bench in hearing these matters again and again on daily basis Admittedly, in spite of the matter before the Hon'ble Supreme Qourt having been taken on many occasions, the Hon,ble Supreme fourt which is seized of the matter has been reluctant in granting ahy interim protection to the Income Tax Department. yet, the a{thorities concemed at the State level are not ready to accept the virdict passed by a majority of High Courts of different States on tle same issue; and to make things further worse, the Income faf OeRa.tment is showing audacity by issuing notices continuouslf under Sections l4g-A and i ; I t2 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 TAXIT, on an issue whether it was justifiable on the part of the Income Tax Depaftment ln not following an order passed by the adjudicating authority only on the ground that the appeais 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. lTO13 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 loose 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. 71ZOZS1 170 taxmann.com 422 (Bombay)l " 1tslsl 113 ITR 589 (Bombay) " 1Z0Z+1 165 taxmann.com 581i300 l-axman 452 (Bombay) 'o leOZltaxmann.com 16/55 ELT433 (SC) rr' 13 "6. Sri Reddy is perhaps riE fht in saying that the officers were not actuated [y any mala fides in passing the impugned ord Lbr. They perhaps genuinely felt that the claim o the assessee was not tenable and that, if it was pted, the Revenue would suffer. But what Sri Re dy overlooks is that we are not concerned here w the correctness or otherwise of their conclusi or of any factual malafides but with the fact that he officers, in reaching in their conclusion, by-passed o appellate orders in regard to the same issue whi were placed before them, one of the Collector (Ap the Tribunal. The High Court I criticized this conduct of the A the harassment to the assesse of these officers to give eff authorities higher to them in the cannot be too vehemently en utmost importance that, ir quasijudicial issues before then bound by the decisions of the The order of the Appellte Colle Assistant Collectors working wit the order of the Tribunal is bind eals) and the other of I [as, in our view, rightly lsistant Cotlectors and t caused by the failure pct to the orders of I appetlate hierarchy. lt that it is of fnhasized I disposing of the ,."r"nr" officers are i,, I appellate authorities. fctor is binding on the his iurisdiction and fng upon the Assistant f,ttector. who function Collectors and the Appellate C under the jurisdiction of the Tribl f judicial discipline require that th le orders of the higher appellate authorities should be jtotlo*"0 unreservedty llhe mere fact that the by the subordinate authorities. nal. The principles of I order of the appellate authority the department - in itself an o and is the subject matter of an ground for not following it unk been suspended by a competen not "acceptabte" to piectionable phrase - pppeal can furnish no [ss its operation has lt court. lf this healthy 74 l \] .I I't 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 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 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 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, 021. Now, in order to protect the interest of the Revenue as also th t of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposa] I of the instant writ petition in terms of the judgment ,.na.r"a Uy tf [is High Court in the case of KanAanala Ruvindra Reddy (t .rpr! ) shall however be subject to the outcome of the SLPs *ni.f, *J ne filed by the Income Tax Department and which is pending con]pideration before the Hon'ble Supreme Court

16. [n the given facts and circums]Itances, this Bench is of the considered opinion that unless and urlfiil we do not timely dispose of matters which are squarely covered by the decision of this Court - and which stands fortified by the de Pisions of the various other High Courts on the very same issue, the pendency of this High Court would furlher be burdened whiiph otherwise can be decided and disposed ofas a covered matter.

17. So far as the interest of the Rev nue is concemed, we are of the considered opinion that the intere of the Revenue has already been considered and protected, as has een observed in paragraphs t6 36,37 and 38 ofthe order which, for ready reference, is reproduced hereunder:

36. For all the aforesaid reasons, the impugned notrces issued and the proceedings drawn by the respondent- Department rs 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 consequenttal orders passed by the respondent-Department pursuant 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-time measure exercising the powers under Article 142 of the Constitution of India, permifted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right r a 17 conferred on the Revenue proceed further if they so order of the Supreme Cou vYo *4n l, 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 ins{ant writ petition, conscious of the fact that the earlier order ol this High Court in the case of Kanakalu Ravindra Reddy (l sup ) is subjected to challenge \ before the Hon'ble Suprelne Cou in SLP No.3574 of 2024, prefened by the Income Tax Deparfment, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Reve ue against the decision of this High Court in the case of Kanak ,rr Ravindra Reddy (l supra). This, in other words, would mean either of the parties, if they so want, may move an appropriate pptition seeking revival o( this writ petition in the light of the decipion of the Hon'ble Supreme Court in the pending SLP on the very same issue.

19. Accordingly, the instant stands allowed in favour of the assessee so far ASL the issue of jurisdiction 1S concerned. As a consequence, {he impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed 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 Ktnkanala Ravindru Reddy (l supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY/I SD/. T. VIJAY KUMAR DEPUTY REGISTRAR 2--u sEcrbt'o.r,"=* To, 506001 .

1. The lncome Tax Officer Ward 1, Warangal, D No- 1-8-610' 3rd Floor' Mayuri ' d;;i;;;' opp'rCr.rFbcr eh"*an, Nikkalasutta, Hanamkonda'waransal- z. ii;-irincipal Chief Commissioner of lncome Tax, AP and TS' 1oth Floor' C- - eicck, i.f.Towers, 10-2-3, A.C. GuarCs, Hy{erabad-500004' S. ii,;- 'A..esi.eni Unit,' iniome Tax Department. National, Faceless Assessment Centre, Delhi, ii;i;it of Finan"ej, noom No 4o1 ' 2nd Floor' E- Ramo. Jawaharlal Nehru Stadium, Delhi-'l 10003' Snt. ouruou MANI/oHAN, Advocate [oPUCl 4 ci;; 5. one cc tot\/s. BoKARb-"sXpttiA i'eobv (Jr''SC FoR lNCoruE TAX) . Two CD CoPies B IVI ocLp -idi" loPUCl - 6 HIGH COURT DATED:2510412025 ORDER WP.No.27424 ot 2024 { rr.iHE5 T4 l^\. o c 22 /'UE M (f i). -.::-- *l + 'l ALLOWING THE WRIT PETITION WITHOUT COSTS {