MOHD NOORUL HUDA v. of the Constitution of lndia and Sec. 148A of the

lleard Mr. T.Chaitanya Kumar leamed counsel for the petitioner and Ms.B.Sapna Reddy, learned Junior Standing Counsel for the Income Tax De ent for the respondents. Perused the record.

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

3. This writ petition is being taken today only on one ofthe grounds, that the notices issued under Section l48A of the Act and the subsequent initiation of procee gs under Section 148 of the Act by the jurisdictional Assessing Officer, whereas in terms of thc amendment that was brought to e lncome Tax Act by way of Finance Act, 2021 w.e.f., 01.04.2 21 onwards, proceedings 2 under Section 1484. of the Act as also under Section 148 of the Act ought to have also been issued and proceeded in a faceless manner.

4. The contention ol 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 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. TNCOME-TAX OFFICER' decided on 14.09.2023 whereby a batch of writ petitions \ rere 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 15lA of the Act read with Notification 1812022 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) 156 taxmann.com 178 (Telangana)l .,

5. Down the line, we find that e same issue has also been decided against the Revenue b varl()us High Courts i.e., by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. ASS STANT COMMISSIONER OF INCOME TAX & OTHERS2, auhati High Court in the case of RAM NARAYAN SAH vs. U ON OF INDIAs, Punjab and Haryana High Court in the case of ATINDER SINGH BANGU vs. UNION OF INDIA4, and Tel ana High Court in the case of SRI VENKATARAMANA REDD PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME AXs where the issue was in respect of international taxation, Bo bay High Court in the case of ABHIN ANILKUMAR STIAH vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION6 hich is again on international taxation and central circle, High Co of Himachal Pradesh in the case of GOVIND SINGH vs. I COME TAX OFFICERT, Gujarat High Courl in the Se of MANSUKHBHAI ' Tzoz+1464 ITR 430 (Bom) ' [(2024) 156 taxmann.com 478 (Gauhat " [(2024) 165 laxmann.com I I 5 (Punjab ' L2024) 167 taxmann.com 4 I I (Telang " 12024) 166 taxmann.com 679 (Bombay '[2024) 165 taxmann.com 113 (Himach Pradesh)l )l )l I Haryana)l 4 DAHYABHAT RADADTYA VS. TNCOME TAX OFFICER, WARD 3(3XOs, Jharkand High Court in the case of SI{YAM SUNDAR SAW vs. UNION oF INDIA9, Rajasthan High Court in the case of SHARDA DEVI CHHAJER vs' INCOME TAX OFFICER & ANOTHER and batch'of writ petitionsro which stood decided on 79.03 '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 sti[[ confronted rvith large filing of identical matters on daity 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 Hexawate Technologies Lrd., (2 supra) as also the one which has been decided by this Court in the case of Kanakala Ravindra Redtly '2024 scc onrine Guj 4012 "2025 SCC Online Jhat281 12023 : RJ-JD : 498 4-DBl t o I 5 (l supra) has been subjected to c allenge in a Special Leave Petition i.e., SLP No.3574 of 2024 efore 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 thg le ed counsel for the Revenue, they have categorically accepted the fact that there is no interim order granted by the Llon'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 re this Bench on daily basis and the pendency is getting increase on matter which otherwise has already been dealt and decided by his very High Court itself.

8. On the one hand, even though 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 l48A and under Section 148 of the Act by the juri ictional Assessing Officer, rather the authorities concerned in th teeth of series of decisions b 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 118 of the Act in contravention to the amendments brought into the lncome Tax Act pursuant to the Finance Act,2020 as also the Finance Act 2021.

9. Upon a query being puf as to why can't this rvrit petition be disposed of in the teeth of the decision rendered by this Courl in the case of Kanakala Ravindra Redd1, (l supra), leamed Standing Counsel for the lncome Tax Department contends that those would unnecessarily burden the lncome Tax Department where they would be required to file equal number of SI-Ps before the Hon'ble Supreme Court and it would be lurther 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 ofthe petitioners in case if this writ petition is kept pending till the finalization of tho SLPs pending before the Hon'ble Supreme Court and the facl that the petitioner is already enjoying the benefit of interim protection. Nonetheless, on the earlier query of this Court as to why the lncome Tax Depa$ment have not come out with a mechanism to issue appropriate instructions or to take G appropriate steps in ensuring that pro eedings under Section 148A of the Act as also the assessment or ers 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 ed by the learned Standing Counsel that the said steps can only 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 j urisdictional igh Courts

10. As a result of which, what we e facing is steep increase of titigation day in and day out even tho gh various orders have been passed by this High Couh allowing it petitions on the very same ISSUE The Income Tax authorities co cemed are still even now in 2025 also initiating proceedings in co travention to the provisions of Section 1514. of the Act and as a sult by now, more than 600 to 700 petitions have been already g t piled up belore this High Court on an issue which otherwise s nds squarely covered by the judgment of this Court in thc case o Kanakala Ravindra Reddy (1 supra). What is also surprising i the fact that though while allowing the writ petitions in the e of Kanakala Ravindra Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected th i.t$oi the petitioners \ \ 8 insofar as the liberty which was granted to thc Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as anrended by the Finance Act, 2020 and the Finance Act,202l . The petitioner assessee would be entitled to challenge or raise the other legal objections if the Rr'venue initiates lresh proceedings. The Depahment has made no cndeavour in availing the said liberty that was reserved for thc Rcvcnue. On the contrary, they have been sti I sticking on to the stand, rvhich this High Court as well as many other High Courts alrcady held to be I l. It appears that because of the aforesaid liberty that this High Courl had granted permitting the Revenue for initiating frcsh proceedings as a one-time measure in a lace less rnanner, the Income Tax Department wants to take advantage ol'the same by protracting these proceedings which would enable tht'rn to meet the limitation that would otherwise come in the way. l-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 C'our1 confirms the decision taken by this }Iigh Court as also by the other High Courts in which the SLPs are still pending, thc I ncome Tax 9 Department would get the advantage f the liberty that is otherwise protected ln favour of the Reve ue for initiation of fresh proceedings from the disposal of thes matters at a much later stage which would be advantageous and neficial to the Revenue and would be equally disadvantageous an detrimental so far as interest of the assesses are concemed. As a onsequence, the Income Tax Department gets an extended period f time for initiation of fresh proceedings.

12. The alarming trend of'docket e losion in this Court, despite the clear precedent set ii Kanakala R vindra Reddy (l supra), is a matter of grave concern. The Income Tax Department's persistent initiation of fresh proceedings, disrega ing the established judicial pronouncements, has led to an unpre edented surge in litigation with over 600-700 petirions piling u on the same issue. This deliberate appioach not only undermi es the principle of judicial precedent but also strains the judicial r sources unnecessarily. The Department's strategy of awaiting the upreme 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 adher g to the established legal 10 position. Such conduct raises serious questions about the administrative effrciency and the respect for j udiciat pronouncements, parlicularly when this Court has already provided a balanced approach by preserwing both the Revenue's rights and assesses lnterests.

13. Another aspect which ne6ds to be considered is that in fact it should have been realized by the Income Tax Department itself and should have found out v.i.a 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 Couft decide the twelve hundred (1200) odd SLPs which it is already seized of or, 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 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 [ncome Tax Department, has not been able to give a convincing reply, except for the fact that such a decision if at atl 17 has to be taken, has to be taken for e whole of India, and which otherwise has to be by way of a poli y decision and that too at the level of Central Board of Direct Though the Iearned 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 der challenge in this writ petition are forcing the assessee to ock the doors of this High Court resulting in filing of hondreds f new writ petitions which in the long run not only affects the disp sal of the writ petitions but also consumes substantial time of e Bench in hearing these matters again and again on daily basis Admiuedly, in spite of the matter before the Hon,ble Supreme ourt having been taken on many occasions, the Hon,ble Supreme Court which is seized of the matter has been reluctant in granting y rnterim protection to the Incorne Tax Department. yet, the uthorities concemed at the State level are not ready to accept the erdict passed by a majority of High Courts of different States on t e same issue; and to make things further worse, the Income T Department IS showing audacity by issuing notices continuousl under Sections 148-A and \ \ 72 148 through the jurisdictional Assessing Officer whereas it ought \.i I ..1 to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXrr, on an issue whether it was justifiabte on the part of the Income Tax Department in not following an order passed by tl1e 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. t\Ir. Paridw?lla 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. 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 Ioose 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. lzozs1 170 taxmann.com422 (Bombay)l " 1tezs1 I l3 ITR 589 (Bombay) " TZOZ+1165 taxmann.com 58 t/300 Taxman 452 (Bombay) lOeZl taxmann.com 16/55 ELT 433 (SC) 13 "6. Sri Reddy is perhaps rig officers were not actuated passing the impugned orde 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 t in saying that the any mala fides in They perhaps he assessee was not pted, the Revenue y overlooks is that we the correctness or or . of any factual e officers, in reaching in their conclusion, by-passed regard to the same issue whic appellate orders in were placed before them, one of the Collector (App ls) and the other of the Tribunal. The High Court h s, in our view, rightly criticrzed this conduct of the As istant Collectors and the harassment to thii assess of these officers to give eff authorities higher to them in the cannot be too vehemently em utmost importance that, in quasijudicial issues before the bound by the decisions of the caused by the failure ct to the orders of ppellate hierarchy. lt hasized that it is of disposing of the , revenue officers are appellate authorities. The order of the Appellte Colle r is binding on the Assistant Collectors working wit the order of the Tribunal is bindi in his Jurisdiction and upon the Assistant Collectors and the Appellate C llectors who function under the jurisdiction of the Trib nal. The principles of judicial discipline require that t orders of the higher appellate authorities should be llowed unreservedly by the subordinate authorities. he mere fact that the order of the appellate authority the department - in itself an o and is the subject mafter of an ground for not following it unl been suspended by a compete is not "acceptable" to ectionable phrase - ppeal can furnish no ss its operation has court. lf this healthy w t t4 rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws. .l

12. We have dealt with this aspect at some length, because rt 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 Reventre. 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 ludicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them." I 5. What is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further titigation 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 1, ;/'/ 15 Finance Act,2020 and Finance Act,2O2 . Now, in order to protect the interest of the Revenue as also that f the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal o the instant writ petition in terms ol the judgment rendered by this High Court in the case of Konkanala Ravindra ReddY (1 suPru) hall however be subject to the outcome of the SLPs which were filed bv the Income Tax Department and which is pending consi tion before the Hon'ble Supreme Court.

16. ln the given facts and circums s, this Bench is of the considered opinion that unless and unt we do not timely dispose of matters which are squarely covered the decision of this Court and which stands fortilied by the dec sions of the various other Fligh Courts on the very same lssue' e pendency of this High Court would further be burdened whic otherwise can be decided and disposed ofas a covered matter ll . So far as the interest of the Rev ue is concerned, we are of the considered opinion that the interest of the Revenue has alreadY bcen considered and protected, as has een observed in paragraPhs

1.6 36,37 and 38 of the order vvhich, 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 tonsequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Sectron 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 tiie 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 lndra, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right r \ 17 conferred on the Revenue proceed further if they so wa order of the Supreme Court Agarwal, supra. uld remain reserved to from the stage of the in the case of Ashish

18. We would only furlher like to wE are inclined to dispose of the ins the fact that the earlier order of this ake observations that since t writ petition, conscious of High Court in the case of Kanakala Ravindra Reddy (l supra ls subjected to challenge before the Hon,ble Supreme Court SLP No.3574 of 2024, prefer-red by the Income Tax.Departm nt, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLp preferred by the Revenu High Court in the case of Kanakala This, in other words, would mean that against the decision of this avindru Reddy \l supra.). ither of the parties, if they so want, may move an appropriate peti ion seeking revival of this writ petition in the light of the decisi of the Hon'ble Supreme Courl in the pending SLp on the very e lssue

19. Accordingly, the instant writ p favour of the assessee so far as the tition stands allowed in lssue of jurisdiction IS concerned. As a consequence, the impugned notice under challenge under Sections l4g_A and 14g 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 Kankanala Rtwindra Rettdy (l supra)' There shall be no order as \ To, I to costs. Consequently, miscellaneous petitions pending' if any' shall stand closed. //TRUE COPY// AS5^rS '\' SD/. C. DEEPIKA NT REGISTRAR ECTION OFFICER I \ 1), Hyderabad, I T TOWER, AC Guards, angana State. The lncome Tax Officer lVard 1( Masab Tank, HYDERABAD, Tel The Princioal Chief Commissioner of lncome Tax, Telangana and A P' HvOerioaO, lT Towers, AC Guards, Masab Tank The Chairman, Central Board of Direct Taxes Department of Revenue' frrri""i.i.vti f i"in"", Gor"rnr"nt of lndia, Secretariat Buildings The National Faceless Assessment Center lncome Tax' Department' New Delhi The Secretary to the Government, Department of Revenue' Ministry of Finance, New Delhi One CC to SRI THANNERU CHAITANYA KUMAR Advocate [OPUC] One CC to Sri Gadi Praveen Kumar, Deputy Solicitor General of lndia [OPUC] One CC to Ms. BOKARO SAPNA REDDY (Jr' SC FOR INCOME TAX) loPUcl 1 2 2 4 E b 7 o Two CD CoPies I KKS GJP (r HIGH COURT DATED:01 10512025 ORDER WP.No.28867 of 2024 n o S r.q I e. o,i, ] 1>, 1 1 AtlE 2025 ':11gHf \ (i .C .t) ALLOWING THE WRIT PETITION WITHOUT COSTS I p 4