PRIIVARY AGRICULTURAL COOPERATIVE CREDIT SOCIET\ v. 1. The lncome Tax Officer Ward 1

challenged to the notices which were issued under Section 148,{ and 148 of the Income Tax Act, 1961 (for short 'the Act') or the assessment orders those havc been passed under Section 147 of the Act which have been assailed

3. This u,rit petition is being taken up today only on one of the grounds, that the notices issucd under Section 148A of the Act and the subsequent initiation ofproceedings under Section 148 ol the Act by the jurisdictional Assessing Officcr, whereas in terms olthe amendment that was brought to the Income Tax Act by way of Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings I , 2 under Section I48A of the Act as also under Section l4g of the Act ought to have also been issued and proceeded in a laceless lTlanner

4. The contention of the petitioner is lhat tl.re issr-re of proceedings being in violation of the Finance Act. 2021 i.e., thc impugned notices under Section I 48A and Section l4g o1' tl.re Act not being issued in a faceless rranner, havc alreadl bccr-r dcalt with and decided by this Court in thc case oi KANKANALA RAVINDR{ ti.EDDY vs. INCOME-TAX OFFICIiRT dccided on 14.09.202f whereby a batch of writ petitions were allorved and the proceedtngs initiated under Section 148A as also under- Section 148 of the Act were held to be bad with consequential reliel's on the ground of it being in violation ol the provisions of' Section I 5 I A ol- the Act reac with Notificarion l8l2OZ2 datcd 29.0_1.2022. -lhe judgment passed by this Court has also been subscqr-rently tbllowcd in a large rumber of writ petitions which were allowed on similar teIms 'IQ023) 156 raxrnann.com I78 (l.clangana)l \ I (

5. Down the line, we find that the sarne 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 COIUMISSIONER OF INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIAT, Punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA4, and 'l'elangana High Courl in the case of SRI VENKATARAMANA RI,DDY PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of international taxation, Bombay High Court in the case of ABHIN ANILKUMAR ST{AH vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION6 which is agairl on international taxation and central circle, High Court of Himachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICERT, Gujarat High Court in the case of MANSUKHBHAI ' lzoz+1464 ITR 430 (Born) '1Q024) 156 taxmann.oom 478 (Gauhati)l ^ [(2024) 165 taxmann.com I l5 (Punjab & I laryana)l ' [2024) 167 taxmarui.corn 4 I I (Tetangana)] " 12024) 166 taxrnann.corn 679 (Bombay)l ' [2024) 165 faxmann.com I l3 (Hirnachal Pradesh)] 4 DAHYABIIAI RADADIYA vs. INCOME T.AX OFFICER, WARD 3(3)(5)8, Jharkand High Courr in the case ol SHyAM SUNDAR SAW vs. UNION OF tNDIAe, Rajasthan High Courr in the case ot'SHARDA DEVI CHHAJBR vs. INCOME TAX OFFICER & ANOTHER and batch of writ pcritionsro rvhich stood decided on 19.03.2024. Similar vicws rrave arso been takcn by the Dir ision Bench of Calcutta Higl.r CourL in the case ol- GIRDHAR GOPAL DALMIA vs. UNTON OF INDIA & ORS (M.A.T 1690 o12023), decided on25.09.2024.

6. Even though the same issue having been decided b1,a large number o1'I{igh Courts, we arc still conh.onted q,ith large filing of identical rxatters on daily basis ranging betu,een 5 to l0 rvrit petitions. 1'hat upon the instructions being soLrght fi.orn the Department, they have been taking a solitary gr.ound that the decision of the Bombay High Court in the case of llacat,are Technologies Ltd., (2 supra) as also thc one rvhich has been decided by this Court in the case of Konokdt Ravindrt Redd1, t202+ SCC ()nlinc Guj 4012 " 2025 SCC Online Jhar 287 72023, RJ-.1 D:4984-DBl o ' 5 (l supra) has been subjected to challcnge in a Special Leave Petition i.e., SLP No.3574 of 2024 before the Hon'ble Supreme Courl and the Hon'ble Supreme Courl is seized of the matter. In addition, there are about 1200 SLPs also filed arising out of the same issue being decided by various High Courts.

7. To a query being put to tl.re lcarned counsel for the Revenue, they have categorically accepted the fact that there is no interim ordcr glanted by the Hon'ble Supleme Court in any of these matters pending belole it. Meanwhile, fresh rvrit pctitions of identical nature are being piled up belore tl.ris Bench on daily basis and the pendency is getting increased on maltel which otherwise has already been dealt and decided by this very High CouLt itself.

8. On the one hand, even though thc order of this Court that was passed as early as on 14.09.2023 and more I 6 months have lapsed, till date, we do not find any remedial steps having been taken by the Income Tax Department to take appropriate steps to either hold back issuance of notice under Section 148A and under Section 148 of the Act by the jurisdictional Assessing Officer, rather the authorities concemed in the teeth of series of decisions 6 by all the major High Courts in India are continuously still initiating proceedings under Section 1484. of thc Act and also initiating proceedings under Section 1 48 o I' tl.re Act in contravention to the arnendments brought into the Income Tax Act pursuant to the Finance Act, 2020 as also the Financc Act 202 I .

9. Upon a query being put as to why can,t this rvrit pctition bc disposed of in the teeth of the decision rendercd b1, this CoLrrl in the case ol Ktnakala Rovindra Reddy (l supra), lcar.ned Standing Counsel for the lncorne Tax Deparlment contends that those u,,ould unnecessarily burden the Incorne Tax Departrrent wltere they w'ould be required to file equal number of SI_ps betbre the Hon'ble Supreure Courl and it would be further. burdcning thc exchequer r,f the Union o1' India. It was also the contention ol- the leamed Standing Counsel that no prejudice would be causod to the interest of the petitioners in case ifthis writ petition is kcpt pending till the finalization of the SLps pending befbr.e the Hon,ble Suprerne Crlurt and the fact that the petitioner is already enjoying the benefit r>f interim protection. Nonetheless, on the earlier query of this Court as to why the Incorne Tax Departrnent have not come out with a nechanisrn to issue appropriate instructions or.to take 7 appropriate steps in ensuring that proceedings under Section l48A 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 l-Iigh Courts, it was submitted by the learned 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 limited to any of these jurisdictional High Courts

10. As a lesult of which, what we are i'acing is steep incrcase ol litigation day in and day out even though various orders have been passed by this High Couft allowing writ petitions on the very same issue. The Income Tax authorities concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 151A of the Act and as a result by now, more than 600 to 700 petitions have been already got piled up before this I{igh Court on an issue which otherwise stands squarely covered by the judgment of this Court in the case of Kanakala Ravindra Reddy (1 supra). What is also surprising is the fact that though while allowing the writ petitions in the case ol Kanakula Ravindra Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners 8 insolar as the liberty which was granted to tlrc Revenue for initiating lir:sh p.oceedings strictly in accordance r.r,ith the amended provisions of the Act, as amended by the Finance Act, 2020 ancl the Fi,ance Act. 2021 . The petitioner asscssee u,oulcl be errtitled to challenge o' raisc the other legar objections if the Rcver.rue i,itiates fresh proceedings. The Deparlment has made no eudeavour. ir.r availing the said liberly that was reserved for the Rcvenuc. On the contrary, thcy have been still sticking on to the stand. which this High Court as u,ell as rnany othcr High Courls ah.r.ady hcld to be bad. I l. It app.ears that becar.rse of the aforesaid libcr.tl that this IIigh Court had granted permitting the Revenue for initiating fi.csh proccedings as a one-time measure in a faceless manner., the Income Tax Deltartrnent wants to take advantage of the same by protraoting thesc proceedings which would enable thcm to rnect the lirnitation that would otherwise come in the way. l.ikewise, if the writ petition is kept pending for a considerable long period of tiu.re and finally at a later stage if the Hon,ble Suprerne Court conflrms the decision taken by this High Court as also by the other Fligh Courls in rvhich the SLI)s are still pending, the Income Tax 9 Depaftment would get the advantage of the liberty that is otherwise prol"ected in favour of the Revenue for initiation of fresh proceedings from the disposal ofthese matters at a much later stage which 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 lor initiation of fresh proceedings

12. 'fhe alarming trend of docket explosion in this Court, despitc thc cleal precedent sel in Kanakolo Ravindra Reddy (l supra), is a matter of grave concern. The Income Tax Deparlment's persistent initiation of fresh proceedings, disregarding the established judicial pronouncements, has led to an unprecedented surge in litigation with over 600-700 petitions piling up on the same issue. 'l-his deliberate approach not only undermines the principle ofjudicial precedent but also strains the judicial resources unnecessarily. The Deparlment's strategy of awaiting the Supreme Couft's decision on pending SLPs white continuing to initiate fresh proceedings appears to be a calculated move to buy time and circumvent limitation periods, rather than adhering to the established tegal 10 1 position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncent ents, parlicularly when this Court has alreacly provided a balanced rrpproach by preserving both the Revertue's rights and assesses interests.

13. Another aspect ivhich needs to be considered is that in fact it should have beerr realized by the Income Tax Departnrent itself'ancl should havc found out via media in ensuring that proceedings undel Scctions I,l8-A and 148 should not havc bcen issued ir.r a faceless rlal)ner, at least till the Hon'ble Supteme Court decide the twelve hundred (1200) odd SLPs which it is alread1,. seized of or, at least the lncomc Tax Department should have lbund out some remedial stops to ensurc that wherever the authorities intend to initiate proceedings under Sections 148-A and 14g, other than in a I-aceless nlirnner, the proceedings shoutd have been def'crred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after the SI_p,s are decided by the Hon'ble Supreme Couft on the very same issue. This again, the Income Tax Deparlment, has not been able to give a convincing replr,, exccpt lbr the fact that such a clecision if at a1l 11 has to be taken, has to be taken for the whole of India, and which otherrvise has to be by rvay of a policy decision and that too at the le",el ol Central Board of Direct Taxes. Though the learned 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 rts per.rdency, such notices which are under challenge in this writ pctition arc tbrcing the assessee to knock the doors of this High Court lcsulting in fiting of hundreds of new writ petitions which in the long run not only affects the disposal of the wlit petitions but also consumes substantial time of the Bench in hearing these mattcrs again and again on daily basis. Admittedly, in spite of the matter befbre the Hon'ble Supreme Court having been taken on manv occasions, the Hon'ble Supreme Court which is seized of the rnaltcr has been reluctant in granting any interim protection to the Incor-ne Tax Department. Yet, the authorities concemed at the Statc level are not ready to accept the verdict passed by a majority o1- Fligh Coufts of different States on the same issue; and to make things lurther worse, the lncome Tax Department IS showing audacity by issuing notices continuously under Sections 148-A and 12 148 through the jurisdictional Assessing Officer. rvhereas it ought to havc beer, only in the laceless manner.

14. ln tlre casc of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXrr, on an lssue whether ir was justihable on the palt of the Incorne Tax Depaftrnent ln 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 ol'Bornbay hcld at paragraph No.25 as under, viz., : "25 ltilr. 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. lTO13 of which one of us (Justice G.S. Kulkarni) was a member, wherejn the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not mean that ti 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 In such decision, following are the relevant observations made by the Supreme Court. '] itZOzS) 170 raxrnann.com 422 (llombay)l " JDzsl I l3 tT R 589 (tlonrbay) " 72OZ+1 I 65 taxmann.corn -sg 1/300 Taxman 452 (Bombay) " ltgTZl raxrnann.corn l6155 DI-T 433 (SC) 13 "6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides 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 rn 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 Tnbunal The Hioh Court has in our view. riohtlv 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 quasijudrcial 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 Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authoritres should be followed unreservedly by the subordinate authorities. 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 its operation has been suspended by a competent court. lf this healthy 74 ru e 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 Solrcitor General that the observations m:rde by the High Court, have been harsh on the officers. lt is clear that the observations of the High Court, seemlngly vehement, and apparen y 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 Hrgh Court shculd be kept in mind in future and the utmost regard sh:uld be paid by the adjudicating authorities and the apoellate 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 theln."

15. What is wor-l-ying this Bench lnorc is the lact that an endeavour i:. being made u,hole hcartedly to cnsure tlot to generate further litigation on issues rvl.rich have been laid to rest b1,3 lsrgs number of I ligh C-ourts all of who,r have takcn a consistent stand that the actic,n of the Income Tax Department being r.iolative of the 15 Finance AcL, 2020 and Finance Act, 2021. Now, in order to protect the interest of the Revenue as also that ofthe assessee, it would be trite at this junchrre, if we dispose of the u,rit petition with an observation/d irection that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kank(nalo Ravindra Reddy (l supra) shall however be subject to the outcorne of the SLPs which rvere fited by the Income Tax Departrnent and rvhich is pending consideration before the Hon'ble Suprcme Cour1.

16. In the given facts and circLrmstances, this Bench is of the considcred opinion that unless and until we do not timely dispose of rnatters which are squarely covered by the decision of this Court and which stands foftified by the decisions of the various other Fligh Courts on thc vely same issue, the pendency of this High Court rvould lurther be burdened which otherwise can be decided and disposed of as a covered matter ll . So far as the intercst of the Revenue is concerned, we are of the,qp,!€idq,qd.9,pi{uql, Ih?L,tJ,E.iqHurt"a{ tlt".BsxEnuq,hffi , elrqq{x been considered and plotected, as lras been observed in paragraphs 16 36,37 and 38 of the order which, lor ready referencc.. 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 pe. se illegal, deserves to be and are accordingly set aslde/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 148 would also get quashed and it is ordered accordingly. The reason we are quashing lhe consequential order is on the principles that when the initration of the proceedings itself was procedurally wrong, the subsequent orders also gets nu llified automatrcally.

37. The prelimrnary 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 whtch stands reserved to be raised and contended in an appropriate proceedrngs.

38. Since the Hon'ble Supreme Court had, rn the case of Ashish Agarwal, supra, as a one{ime measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Cou( allowing the petitions only on the procedural flaw. the nght 77 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 lufther like to make observations that since rve are inclined to dispose ol the instant writ petition, conscious of tl.re fact that the earlier order of this High Court in the case of Kanakala Rovindra Reddy (l supra) is subjected to challenge before the Hon'ble Suprcme Couft in SLP No.3574 of 2024, I prefened by thc Income Tax Deparlment, we rnake it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Revenue against the decision of this lligh Courl in the case ol Kanakals Ravindra Reddy (1 supta). This, in other rvords, would mean that either of the parties, if they so want, rnay 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 ol-r the very same issue.

19. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction 1S concemed. As a consequence, the 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 terrn; as have been passcd by this High (loun in the case of Kankonala Rovindro Reddy (l supra). There sl.rall be no orcler as to costs. Consr:quently, miscellaneous pet.itions pencling, il any, shall stand closed. //TRUE COPY// S \ VANI SWAMY REGISTRAR \l sEcIoN oFFtcER To c\ ,SA Delhi '1 . The lncome Tax Officer Ward '1 , Khammam / ln o e Tax Office, Rajeev Gunt, Rajiv Chowk, Near Kinnerasani Theatre, K am mam Telangana State. 2. The Principal hief Commissioner of lncome Tax. Te langana and A.P, Hyderabad, ll Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana 3. The National Faceless Assessment Center, lncome Tax Department, New 4. The Chairman, Central Board of Direct Taxes, Department of Revenue, Ivinistry of Finance, New Delhi - 1 10 001 . Mllis-try of Finance, Government of lndia, Secretariat Buildings, New Delhi - 1'10001. 5. The Secretar)'to the Government, Union of lndia, Department of Revenue, 6. One CC to SRI THANNERU CHAITANYA KUMAR, Advocate [OPUC] 7. One CC to Ms. BOKARO SAPNA REDDY (Jr. SC FOR TNCOME 8. One CC to SRI GADI PRAVEEN KUMAR, DEpUTy SOLTCITOR GENERAL 9. Two CD Copi,:s (f OF lNDlA, Advocate (OPUC) TAX) Advocale [OPUC] lD ": -___.r' I d \i\ !r1E I' rA t 1 6 JUL 2ffi )a r-ra ^ i:i-lir\itll --::::__-:= ':-/ o(J * HIGH COURT DATED:01 10512025 ORDER WP.No.28960 of 2024 ALLOWING THE W.P WITHOUT COSTS. ,{ 61