High Court · 2025

e Constitution of lndia praying that in the filed therewith, the High Court may be rection, especially one like WRIT OF tice dated O4-O4-?O24 issued by 1'r f the Act with DIN and Notice No 9(1) as being without jurisdiction arbitrary om being violative of provisions of section so contrary to the circular issued by CBDT Act and consequently set aside the notice under section 1 48 DIN and Notice No TBA/AST/S/1 48 1 t2024-25t 1063904529(1 ) dated 04-C4-2C24 lA NO: 1 OF 2024 Petition under section 151 cpe praying that in the circumstances state(J in the affidavit filed in support of the petition, the l{igh court may be preased kr stay the notice dated 04-04-2024 issued by 1st Respc,ndent under section 14g or the Act with DIN and Notice No lraA/AST/s/148_112o24-2s11o63904529(1)ancl all consequential proceedings pending the disposal of the writ petition. Counsel for the petitioner: SRI F{AJA SneXAR RAO t;ALVAJI Counsel for the Respondent Nos.l and 2: MS. J SUNITHA, SC FOR INCOME TAX DEP,ARTMENT Counsel forthe Respondent Nq.3: SRI B. MUKHER.JEE, REPRESENTING THE UNON,OF ]NDIA The Court made the following: ORDER TIIE TfONOURABT,E SRI JUSTICE P.SAM KOSI{Y AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITI N No.29095 OF 2024 ORDER: (per Hon'He Si Justice P.km Koshy) Heard Mr. Raja Sh*ar Salvaji, learned counsel for the petitioner, Ms. J.Sunitha, leamed Junior Standing Counsel for the lncome Tax Department for respondent Nos.l and 2 and Mr. B. Mukhe{ee, learned co,]nsel represeflting the Union of India for respondent No.3. Perused record

2. This is a writ paition where the proceedings are either challenged to the notic€s whiqh were issued under Section l48A and 148 of the [ncome Tax Apt, 1961 (for short 'the Act') or the assessment orders those have been passed under Section 147 of the Act which have been assat

3. This writ petition is beirig taken up today onty on one of the grounds, that the notices issued under Section l48A of th€ Act and the subsequent initiation of proceedings under Section [48 of the Act by the junsdictional Ilr.ssessing Offi0Er;-rvhereas in terms of the amendment that was brc ught to the Income Tax Act bY waY of Finance Act, 2021 w.e.f., 0l .04.2021 onwards, proceedings under Section l48A of the Act as also.under. Section l4g of the Act ought to have also been issued and prooeeded in a faceless manner.

4. The contention of the petitioner is that the issue of proce€dings being in violation of the Financr: Act, 2021 i.e., the impugned notices under Section l48A and Se,:ti,cn l4g of the Act not being issued in a faceless manner, have alnz<iy been dealt with and decided by this Court in r,he case ,rf KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICERT decided on 14.09.2023 whereby a barch of writ petitions rvere allowed and the proceedings initiated under Section l48A 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 I 5 lA of the Act rcad with Noti fi catio n lB/2022 dated 29.0i,.2022. The said judgmcnt passed by rhis Court has also been subse<luently followed in a largc number of writ petitions which were :rll,rwed on similar terms. '[(2023) I-5(, (axrnann com 178 (Telangana)] 3 5, Down the line, we find that the samc issue lrag olso been various High Courts i'c', decide.d against the Revenrfe bY the case of IIEXAWARE by the BornbaY High Coutt in TECHNOLOGTES LTD., t.l lssrsraxr CoMMISSIONER OF INCOME TAX & OTIIERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs' I.INION OF INDIA3' Punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. TJNION OF INDI#, and'Telangana High Court in the case of SRI VENKATARAMANA NEDDY PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of international axation, Bombay High Court in the case of ABHIN ANILKUMAR SH'f,H vs' INCOME TAX OFFICER' INTERNATIONAL TAXATION6 which is again on intemational taxation and central circle, High Court of Himachal Pradesh in the case of GOVIND SINGH vs' INCOME TAX OFFICER?' the case o[ MANSUKHBIIAI Gujarat High Court rn ' tzozql 464 lrR 430 (Bom) ' (2024) I 56 taxmann.com 478 ^ l(2024) 165 taxmann.com I l5 '12024) 167 taxmann.com 4l I " 12024) 166 tzxmann'com 679 'izoz+l tts taxmann.com I I J (Gauhati)l (Punjab & I{aryana)l Tetangana)l Bombay)l [{irnachal Pradesh)] 4 DAIf,YABHAI RdDADIyA vs. INCOML lAX OFFTCE& WARD 3(3)(tt, Jharkand High Court in rtre case of SIIyAM SUNDAR SAW vs. UMON OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CHIIAJER vs. INCOME TAX OFFICER & ANOTHER and batch of ,,vrit petirionsro which stood decided on 19.03.2024 Similar viervs hirve also been hken by the Division Bench of Calcutta High Court in the case of GIRDHAR C,OPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 of Zl23),decidert on25.09.2024

6. Even though rhe same issue having been tlecided by a large number of High Courts, wc are still confrontecl u,ith large filing of identical matters on daily basis ranging between 5 to I 0 writ petitions. That upon the insrructions being sought liom the Department, they have been taking a solitary ground rhat the decision of the Bombay Ii igh Court in the r:ase of Hexawore Technologies Ltd., (2 supra) as also the on<: ,,vhich has been decided by this Court in the case of Kanakala Ravin&a ftslly 8202+ SCC Online Cuj 40 t 2 '2025 SCC Online Jhar 2g7 12023 : RJ - ! L-l :a984_t)B I t o \t ( 5 (l supra) has boen subjcct to challcngo in a Spccial Leavo Petition i.e., SLP No.3574 o 2024 before the Hon'ble SuPreme Court and the Hon'ble Supreme Court is seized of the matter. In addition, there are about l2O0 SLPs also filed arising out ofthe same issue being decided by rious High Courts

7. To a query being put to the leamed counsel for the Revenue, they have categorically accegted the fact that there is no iriterim order granted by the Hon'ble Supreme Court in any of these matters pending belore it. Meanwhile, fresh writ Petitions of identical flature are being pil up before this Bench on dailY basis and the pendency is getting ihcreased on matter which otherwise has already been dealt and deqided by this very High Court itself.

8. On the one hand, even though the order of this Court that was passed as early as on [4 .09.2023 and more 16 months have lapsed, till date, we do not find any remedial steps having been taken by the lncome Tax Delartment to take appropriate steps to either hold back issuance of otice under Section l4EA and under Section 148 of the Act by e jurisdictional Assessing Offrcer, rather the authorities concemgd in the teeth of series of decisions \ 6 by all tbe major High Corrts in India are continuously still initiating proceedings under Section I4gA of the Act and also initiating proceedings under Section t4g of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,202O 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 renderecl 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 [ncome Tax Deparlnrent where they would be required to file equal number of Silps before the Hon'ble Supreme Court and it would be fr.rrrher burdening the exchequer of the Union of India. It was also the r:ontention o[the leamed Shnding Counsel that no prejudice would be caused to the interest ofthe petitioners in casc ilthis writ petition is kept pending till the finalization of the SLps pending before rhe Hon,ble Supreme Court and the fact that the peritioner is already enjoying the benefit of interim protection. Nonetheless, on tfre earlier queryz of this Court as to why the lncome 'l'ax Departmc,nt have not come out with a mechanism to issue appropriate instnrctions or to take 1 7 Eppropriate ste?s in ensuring that procd ings under Scction l48A oF thc Act as also the assessl nent orders under Section 148 ofthe Act are kept in a hold in the Iight ofthe decisions dedcided by the various High Courts, it was submitted by the learned Standing Counsel that the said steps carp 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 jurisdicItional High Courts.

10. As a result of which, wfrat we are facing is steep increase of litigation day in and day out though various orders have been passed by this High Court all wing writ petitions on tle very same issue. The Income Tax autho ties concemed are still even now ln 2025 also initiating proceedings in contravention to the provisions of Section 15lA of the Act an d as a result by now, more than 600 to 700 petitions have been alieady got piled up before this High Court on an issue which otherfwise stands squarely covered by the judgment of this Court in the'case of Kanakala Ravindra Reddy ( I supra). What is also su rising is the fact that though while allowing the writ petitions the case of Kanakala Ravindra Reddy (l supra), the Divisi onl Bench while reserving the right of the Revenue, has also protected the interest of the petitioners 8 insofar as the liberfy which was granted to the Revenue for initiating liesh proceedings strictly in accordar cr: with the ameoded provisions of the Act, as amended by the Finance Act, 2OZO and the Finance Act,202l. The petitioner assessee would be entitled to challenge or raise the other legal objetions if the Revenue initiates fresh proceedings. The Department has marle no endeavour in availing the said liberfy that was reserved for the Revenue. On the contrary, they have been still sticking on to rtre stand, which this Eligh Court as well as many other High Court-.; already held to be bad. I I. [t appears that because of the aforesaid liberry rhat this High Court had granted permitting the Revenue lbr initiating Fresh proceedings as a one-time measure in a facel,:ss manner, the lncome Tax Department wants to take advantagc of the same by protracting these proceedings which would enable rlicm to meet the limitation that would otherwise come in rhe war,,. l_ikewise, iF the writ petition is kept pending for a considerable l,rng penod s[ time and hnally at a later stage if the Hon'bte Suprerne ('ourt confrrms the decision taken by this t{igh Court as also by thc other High Courts in which the SLPs are still pcnding, rl.rc Income Tax 9 D€.partmont would gc{ the edvantage of thc liberty that is othotwise Revenue for initiation of fresh protected in favour of the proceedings from the disPosal t bf thesrc maners at a much later stage which would be advantageous and beneficial to the Rwenue and would be equally disadvantagepus and detrimental so far as interest oftheassessesareconcemed.Asaconsequence'thelncomeTax Department gets an extended period of time for initiation of fresh proceedings.

12. The alarming trend of d cket explosion in this Court, despite the clear precedent set in.l(az kala Ravindra ReddY (l suPra), is a matter of grave concem. The fncome Tax Department's persistent initiation of fresh proceedings, disregarding the established judicial unprecedented surge in litigation pronouncements, has led to with over 600-700 Petitions piting up on the same issue' This deliberate aPProach not onlY undermines the principle of judicial precedent but also strains the ludicial resources unnecessarily' The Department's strategy of awaiting the Supreme Court's decision on pending SLPs while conti4uing to initiate fresh proceedings appears to be a calculated move to buY time and circumvent limitation penods, rather t n adhering to the established tegat 1U Position. Such conduct raises serious questions about the administrative efficiency and the rcspect for judicial pronouncements, particularly when this Court has already provided a balanced approach by preserving both the Revenue,s rights and assesses lnt€rests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax l)epartment itselfand shou.ld have found out via media in ensuring that proceedings under Sections I48-A and. l4g should not have been issued in a faceless manner, at least till the Hon,ble Supre.mr, Court decide the twelve hundred (1200) odd SLps which it is alr,:ady seized of or, ar least the Income Tax Department should have lound out some remedial steps to ensure that wherever the arrthorities intend to initiate proceedings under Sections l4g_A and l4[i, other than in a faceless manner, the proceedings should havo been deferred without precipitating the matter further intimating lhc assessee that they shall initiate appropriate proceedings only aftt:r the SLp,s are decided by the Hon'ble Supreme Court on the vcry sanre issue_ This again, the Income Tax Department, has not been ablc ro give a convincing reply, except for the fact that such a dt:cisron rf. at all Y 11 has to bc taken, hes to be takfn for the whole of tndia' and which otherwiso has to bo by way of a policy decision and that too at the level of Central Board of Direct Taxes' Though the learned Standing Counsel for the Incpme Tax Department cootended that the Delhi High Court dismissqd a writ petition of similar nature' on the one hand when the High Court is struggling to reduce its pendency, such notices whifh are under challenge in this writ petition are forcing the as see to knock the doors of this High Court resulting in filing of h dreds o[new writ petitions which in the long run not onlY affects the disposal of the writ petitioos but also consumes substantial t me of the Bench in hearing these matters again and again on d ty basis. Admittedly, in spite of the matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Stipreme Court which is seized of the matter has been reluctant in granting any interim protection to the lncome Tax Department. Yet, the authorities concerned at the State level are not ready to apcept the verdi ct passed by a majority ol High Courts of differcnt $tates on the same issue; and to make things further worse, the ncome Tax Department ts showing audacity by issuing notices cbntinuously under Sections 148-A aod t2 l4E through the jurisdictional Assessing OfEcer whereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDL{ vs ASSISTANT COMMISSIONE& INCOME TAXrr, on arr issue wherher it was lustifiable on the paft of the Income Tax l)epartment in not following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Di,risrion Bench of the High Court of Bombay held at paragraph No.2j; as under, viz., : "25. Mr. Paridwalla has righfly drawn out attention to the decision of this Ccurt in Commissioner of lncome Tax vs. smt. Godavaridevi Sarafr2 as also the recent decision of the co- ordinate Bench,of this Court in Samp Furniture (p,r Ltd. v. tTO,j of lvhich one of us (Justice G.S. Kulkami) was a nlernber, wherein the Court cztegorically observed thal the Revenue having not "accepted' the iudgment of the High Court would rrol mean that tifl the same is set aside in a manner known to law, it would loose rls binding force. Referring to the decision of the Supr?me Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.,o, the Court obsened lhat the approach cf the officials of Revenue of lrealing Cecisions being "not acceptable" was critioized by the Supreme Court. ln such decision, following are lhe relevant observations made by the Supreme Court. I I ltlo"r":,, lt*:T1T:"o. 422 (Bombay)l ' tte78l il3 rTR 589(Bombay) t,',1202I1I65 taxnrann.com 5g I/300 .faxman '' 1 t9921 raxnunn.com I 6/55 ELT 433 (sc) ,\ 452 (Bomt,ay) .,. 13 Eps rlght in ssying that lhe 16. Sd Reddy le perhl onioe.rs were not aJ u6t€d by 6ny mela fid€s >d orders. They perhaps passing the inrpugnl genuinely felt that the i ,aim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. 8ut what Sri Reddy overlooks is that we are not concemed hpre with the correctness or otherwise of their c( lnclusion or of any factual malafkjes but with the fi [ct that the ofiicers, in reaching [asseO two appellate orders in which were placed before Itor (Appeals) aM the other of the Tribunal. The High Court has, in our view, nghtly in their conclusbn, by-t regard to the same iss them, one of the Collec criticized this conduct df the Assistant Collectors and the harassment tro the I ssessee caused by the failure of these offrcers o I live effect to the orders of n in the appellate hierarchy. lt authorities hbher to thel ntly emphasized that it is of cannot be roo uenem! hat, in disposing of the utmost impo(ance ( quasi.iudicial issues before them, revenue oficers are bound by the decisbn$ of the appellate authorities. te Collector is binding on the The order of the Appell fting within his iurisdiction and I i. oinoi* upon the Assistant [ll"r. Coll""to.. who func{ion In" trlor*t. The principles of under the iurisdiction of 1 judicial discipline require that the orders of the hrgher the order of the Tribuna Collectors and the Appr Assistant Collectors wor by the subordinate auth,i appellate authorities sheuld @ followed unresenredly rities. The mere fact that the uthority is not "acceptable' to order of the aOOefrate a] the department - in it1 )lf an objectionable phrase - r of an appeal can furnish no and is the subiect mattd ground for not following it unbss its operalion has been suspended by a competent court. lf this healthy 14 rule is not followed, the result will onl't t)e undue harassment to assesses and ctaos in adm'nistration of tax lau/s.

12. t e have. dealt with this aspect at s,rme length, because it has been suggested by the leamed Additional Solicitor General that the obs,?rvations made by the High Court, ha\€ been harsh on the officers. lt is clear that the observations of the High Court, seemingly vehement, and atparently unpalatable tO the Revenue, are only inten,Je(J to curb a tendency in revenue matters which, if allowed to become wijespread, could result in considerable harassment to the assesses-public without an./ benefit to the Revenue. We would like to say that the department should take these obser tions in the proper spirit. The observations of the t{igh Court should be kept in mind in futureand the utrnost regard should be paid by the adjudicating authoriti,-"s and the appellate authorities to lhe requirements of judicial discipline and the need for giving effect to the orders of the higher appetlate authorities which are binding on them."

15. What is worq,ing this llench more is the lact that an endeavour is being made whole heartedly to ensurr: not to geoerate further litigation on issues which have been laicl trt rest by a large number of l{igh Courts all of whom have taken a consistent stand that the actron of the [ncome Tax D€partment beinp; violative of the 15 Finance Act, 2020 and Financr ! Act, 2021. 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 < fispose of the wdt p€tition with an observation /direction that the [isposat of the instant writ petition in terms of the judgment renderr [d by this High Court in the case of Kankanala Ravindra Reddy ( I supra) shall however be subject to the outcome of the SLPs wt fich were filed by the Income Tax Department and which is pend ing consideration before the Hon'ble Supreme Court.

16. [n the given facts and fircumstarrces, this Bench is of the considered opinion that unless I and until we do not timely dispose of matters which are squarely fovered by the decision of this Court and which stands fortified by I the decisions of the various other High Courts on the very sam e lssue, the pendency of this l{igh Court would further be burder [ed which otherwise can be decided and disposed ofas a covered m latter.

17. So far as the interest of [he Revenue is concerned, we are o[ the considered opinion that th€ finterest of the Revenue has already been considered and protected, I as has been observed in paragraphs 76 36,37 and,38 of the order which, for ready relbr,:nce, is reproduced hereunder:

36. For all the aforesairl reasons, the impurSned notices issued and tlle proeeedings drawn by the respoMent- Department is neither tenabb, nor sustainable, The nolices so issued-and-lhe procedure acopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all tho impugned orders getting quashed, the consequential orders passed by the respondent-Departrnent pursuant to the notices issued under Section 1-47 and 1.4A would also get quashed and itr is ordered accordihgly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedirgs itself was procedurally w-ong, lhe subsequent ordr:rs 3;5e gslt nullified automatically.

37. fhe pretiminary objection raised.by the petitioner is sustained and all these wi-it petitions slands allowed on this very jurisdictional issue. Since the imprgned notic€s and orders are gefting quashed on lhe point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which slands reserved to be raised and contenced in an appropriate proceedings.

38. Since the Hon'ble Supreme Cou( ha(|, in the case of Ashish Agarwal, supra, as a one{ime measure exercrsing the powers under A(icle 1.12 of the Constitution of lndia, permifted the Revenue to proceed under the subslituted provisions, and this Courl allowing the petitions onty on lhe procedural flavy, the right t - ,, 1 confened ori the Reven pfoce€d sder of the Stpreme fufthef if they so would remain reser\red to want frorn ttE stage of tt|e in tte case of Ashish Agarwal, supra-

18. We would only furth€r I to make observations that since we are inclined to dispose of the stant writ petition, conscious of the fact that the earlier order o this High Court in the case of Kanakala Ravindra ReddY (l pra) is subjected to challenge before the Hon'ble SuPreme ourt in SLP No.3574 of 2O24' preferred by the Irrcome Tax partment, we make it clear that ( ( allowing of the instant writ Peti ion is subject to outcome of the aloresaid SLP preFerred bY the venue against the decision of this High Court in the case ol Kan la Ravindra ReddY (l suPra} This, in other words, would mea that either of the Parties, i[ theY so want. may move an approprl te petition seeking revival of this writ petition in the light of the ecision of the I-Ion'ble SuPreme Court in the pending SLP on the ery same tssue.

19. AccordinglY, the instant writ petition stands allowed in iavour of the assessee so as the issue of jurisdiction IS concemed. As a consequen the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed- j I i I I 16 o The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this High rlourt in the case of Kankanala. Ravindra Reddy (l supra). Thero shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY// SD/. B. REKHA RANI TANT REGISTRAR \*.------J SECTTON OFFICER To, 1 . The Assistant Commissioner o_f lncome.Tax, CinJe \', Karimnagar 2- Nationat Faceress Assessment centre, rildn; rta-x iiepartment, Ministrv of f i.n-" t 99, Room No 40 1 2ndF toor e -na',ns .lawa ni;6 ti;h; "Sild;,ilii. U"irii 110 003 3 IPj^:"::!12., Minisrry of Finance, Deparrment,)f tRevenue, Norrh Btock, . uenrrat Secretariat, Union of lndia, New Delhi_1 l0 OO1. 4. One CC to Sri Raia Shekar Rao Salvaji, Advoc:rte 1OeUC1 5. one CC_to Ms. J Sunirha, SC iorl;co6; i;; deplkinent topuct 6. one CC to Sri B. Mukherjee, representing ihJai;i;;;i tndLiop-tjcl 7- Two CQCopies TJ GJ e HIGH COURT DATED:0210512025 ORDER WP.No.29095 of 2024 , (.1i ;'5 .:i a) Lr !, q 23 IUEM >: a) !^, \.. ALLOWING THE WRIT PETITION WITHOUT COSTS \q-'t'