The Primary Agricultural Cooperative Credit Society v. AAC(1) of the Act, respectively

challenged to the notices which were issued under Section 148A and 148 of the Income Tax Act, 196l (for short'the Act') or the assessment orders those have been passed under Section 147 of 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 under Section I48A of the Act and the subsequent initiation of proceedings under Section 148 of the Act by the jurisdictional Assessing Office1 whereas in terms of the amendment that was brought to the Income Tax Act by way of Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings 2 under Section 148A of the Act as also under Sect on 148 of the Act ought to have also been issued and proceede<l in a faceless manner.

4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Act, 2021 ie, the impugned notices under Section 148A and Section t48 of the Act not being issued in a faceless manner, have already'been dealt with and decided by this Court in the case of FIANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICER' decided on 14.09.2023 whereby a batch of writ petitions u'et e allowed and the proceedings initiated under Section 148A as alsc'under Section 148 of the Act were held to be bad with consequentrirl reliefs on the ground of it being in violation of the provisions of S ::ction I 5 1A ol the Act read with Notihcation 1812.022 daled29-03.1022. The said judgment passed by this Court has also been subsequ':ntly followed in a large number of writ petitions which were allerved on similar terms. 'l(2023) 156 taxmann.com 178 (Telangana)l -1

5. Down the line, we find that the same 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 COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati High Courr in rhe case of RAM NARAYAN SAII vs. UNION OF INDIAT, punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME TAX5 where rhe issue was in respect of international taxation, Bombay High Court in the case of ABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION6 which is again on inremarional 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 '7zoz11464 ITR 430 (Bom) 'l(2024) 156 taxmann.com 478 (Gauhati)l ' [(2024) 165 taxmann.com I l5 (punjab & Haryana)] ' [2024) 167 taxmann.com 4l I (Telangana)] " 12024) 166 taxmann.com 679 (Bombay)l ' [2024) 165 taxmann.com I 13 (Himachal Pradesh)] 4 DAHYABHAI RADADTYA VS. INCOME TZ\X OFFICER, WARD 3(3X5)8, Jharkand High Court in the cese of SHYAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthz n High Court in the case of SHARDA DEVI CHHAJER vs. MCOME TAX OFFICER & ANOTIIER and batch of writ p,litionsro which stood decided on 19.03.2024. Similar views have ,rlso been taken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF |\DIA & ORS (M.A.T 1690 of 2023), decided oo25.09.2024

6. Even though the same issue having been decided by a large number ol High Courts, we are still confronted wilh large filing of identical matters on daily basis ranging between -5 to 10 writ petitions. That upon the instructions being sot ght from the Department, they have been taking a solitary gr,lund that the decision of the Bombay High Court in the cast: of Hexaware Technologies Ltd., (2 supra) as also the one u'hich has been decided by this Court in the case of Kanakalu Rt'vindra Reddy '2024 SCC online Guj 4012 '2025 SCC Online Jhar 287 12023 : RI-JD :4984-DBl 1 5 (1 supra) has been subjected to challenge in a Special Leave Petition i.e., SLP No.3574 of 2024 before the Hon,ble Supreme Court and the Hon'ble Supreme Court is seized of the matter. In addition, there are about 1200 SLps also filed arising out ofthe same issue being decided by various High Courts.

7. To a query being put to the learned counsel for the Revenue, they have categorically accepted the fact that there is no interim order granted by the Hon'ble Supreme Court in any of these matters pending before it. Meanwhile, fresh writ petitions ol identical nature are being piled up before this Bench on daily basis and the pendency is getting increased on matter which otherwise has already been dealt and decided by this very High Court itself.

8. On the one hand, even though the order of this Court that was passed as early as on 14.09.2023 and more 16 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 l48A and under Section 148 of the Act by the jurisdictional Assessing Officer, rather the authorities concemed in the teeth of series of decisions t..l 5 by all the major High Courts in India are cc'ntinuously still initiating proceedings under Section 148,4. of thr: Act and also initiating proceedings under Section 148 o1' the Act in contravention to the amendments brought into the llcome Tax Act pursuant to the Finance Act,2020 as also the Finalr,e Act202l.

9. Upon a query being put as to why can't this',vrit petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravindra Reddy (l supra), leirrned Standing Counsel for tl-re Income Tax Department contends lhat those would unnecessarily burden the Income Tax Departmert where they would be required to file equal number of Sl,.Ps before the Hon'ble Supreme Court and it would be futher burdening the exchequer of the Union of India. It was also the c,lrltention of the leamed Standing Counsel that no prejudice would b,: caused to the interest ofthe petitioners in case if this writ petition is kept pending tilt the finalization of the SLPs pending before the Hon'ble Supreme Court and the fact that the petitioner is alrr:ady enjoying the benefit of interim protection. Nonetheless, on th,r earlier query of this Court as to why the Income Tax Department have not come out with a mechanism to issue appropriate instructir-,ns or to take 7 appropriate steps in ensuring that proceedings under Section l48A ofthe Act as also the assessment orders under Section 148 ofthe Act are kept in a hold in the light ofthe decisions dedcided by the various High Courts, it was submitted by the leamed Standing Counsel that the said steps can only be taken at the level of CBDT as any such steps would have to be taken Pan India and cannot be limited to any of these jurisdictional High Courts.

10. As a result of which, what we are facing is steep increase of litigation day in and day out even though various orders have been passed by this High Court allowing writ petitions on the very same issue. The lncome Tax authorities concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 15 I A of the Act and as a result by now, more than 600 to 700 petitions have been already got piled up before this High 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 of Kanakala Ravindrs Reddy (l supra), the Division Bench while reserving the right of the Revenue,, has also protected the interest of the petitioners ( I \l\i \ 8 insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance r.rith the amended provisions of the Act, as amended by the Financ,: Act, 2020 and the Finance Act,202l. The petitioner assessee wo.rld be entitled to challenge or raise the other legal objections if the I?.evenue initiates fresh proceedings. The Department has made tro endeavour in availing the said liberty that was reserved for the F.evenue. On the contrary, they have been still sticking on to the ;.and, which this High Court as well as many other High Courts already held to be bad. 1 1. It appears that because of the aforesaid liber1'r that this High Court had granted permitting the Revenue for nitiating fresh proceedings as a one-time measure in a facek:t;s manner, the Income Tax Department wants to take advantage ,rf the same by protracting these proceedings which would enable tt em to meet the limitation that would otherwise come in the way. t.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 (.lourt confirms the decision taken by this High Court as also by thc other High Courts in which the SLPs are still pending, the Income Tax I - Department would get the advantage of the liberty that is otherwise protected in favour of the Revenue for initiation of fresh proceedings from the disposal of these matters at a much later stage 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 for initiation of fiesh proceedings.

12. The alarming trend of docket explosion in this Court, despite the clear precedent set in Kanakala Ravindra Reddy (l supra), is a matter of grave concem. The Income Tax Department'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. This deliberate approach not only undermines the principle of judicial precedent but also strains the judicial resources unnecessarily. The Department's strategy of awaiting the 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 adhering to the established legal ) position. Such conduct raises serious quesli()ns about the administrative efficiency and the respect for judicial pronouncements, particularly when this Cou( has already provided a balanced approach by preserving both the Revetrue's rights and assesses interests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Depattment itself and should have found out via media in ensuring lhat proceedings under Sections 148-4 and t48 should not have b':en issued in a faceless manner, at least till the Hon'ble Supreme ('ourt decide the twelve hundred (1200) odd SLPs which it is alreadv seized ofor, at least the Income Tax Department should have lirund out some remedial steps to ensure that wherever the autho -ities 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 tl e assessee that they shall initiate appropriate proceedings only aftel the SLP's are decided by the Hon'ble Supreme Court on the vc'y same issue. This again, the Income Tax Department, has not beerr able to give a convincing reply, except for the fact that such a deoision if at all t' I 77 has to be taken, has to be taken for the whole of India, and which otherwise has to be by way of a policy decision and that too at the level of Central Board of Direct Taxes. Though the leamed Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of similar nature, on the one hand when the High Court is struggling to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this High Court resulting in filing of hundreds of new writ petitions which in the long mn not only affects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily basis. Admittedly, in spite of the matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the Income Tax Department. Yet, the authorities concemed at the State level are not ready to accept the verdict passed by a majority of High Courts of different States on the same issue; and to make things further worse, the Income Tax Department is showing audacity by issuing notices continuously under Sections 14g-A and I r ( t2 \ 148 through the jurisdictional Assessing Offrcer ..rrhereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vr;. ASSISTANT COMMISSIONER, INCOME TAX|r, on an issue whether it was justifiable on the part of the Income Tax Dtlrartment in not following an order passed by the adjudicating auth,.rrity only on the ground that the appeais are pending, the Divisiorr Bench of the High Court of Bombay held at paragraph No.25 as .rnder, viz., : "25. Mr. Paridwalla has rightly drawn out atte.rtion to the decision of this Court in Commissioner of lncome 'l ax vs. Smt. Godavaridevi Saraflz as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) l.td. v. lTOl3 of which one of us (Justice G.S. Kulkarni) was a mem rer, wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not rrean that till the same is set aside in a manner known to law, it wo.rld loose its binding force. Referring to the decision of the Suprere Court in Union of lndia vs. Kamlakshi Finance Corporatiorr Ltd.r4, the Court observed that the approach of the officials of Revenue of treating decisions being "not acceptable" was criticized by lhe Supreme Court. ln such decision, following are tl.e relevant observations made by the Supreme Court. ]] ttzOzSl 170 taxmann.com 422 (Bombay)l '' [978] I l3 lTR 589 (Bombay) '3 TZOZ+1165 taxmann.com 581/300 Taxman 452 (Bombay) 1t}9Z1taxmaru1.com 16155 ELT 433 (SC) 13 is perhaPs right in saYing that the "6. Sri Reddy not actuated bY any mala fides in officers were impugned orders. TheY PerhaPs passing the genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual malafides but with the fact that the officers, in reaching in their conclusion' by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view' rightly criticized this conduct o{ 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 quastludicial 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 lhe 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 authorities should be followed unreservedly by ihe subordinate authorities The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an obiectionable 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 14 rule is not followed, the result will only b€ undue harassment to assesses and chaos in admi.ristration 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 obsor ,/ations made by the High Court, have been harst- rn the officers. lt is clear that the observations of ti e High Court, seemingly vehement, and apf,arently unpalatable to the Revenue, are only intended lo curb a tendency in revenue matters which, if al o ed to become widespread, could result in consirlerable harassment to the assesses-public without an)r benefit to the Revenue. We would like to say tl-at the department should take these observations n lhe proper spirit. The observations of the High Court should be kept in mind in future and the utmosl regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of jLrdicial discipline and the need for giving effect to the rrders of the higher appellate authorities which are binding on them."

15. What is worrying this Bench more is th:: fact that an endeavour is being made whole heartedly to ensur<: )lot 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 .onsistent stand that the action of the Income Tax Department being ,'iolative of the 15 Finance Act,2020 and Finance Act,2O2l' Now' inorder'to protect the interest of the Revenue as also that of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal oIthe instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Reddy (1 supra) shall however be subject to the outcome of the SLPs which were filed by the lncome Tax DepartmentandwhichispendingconsiderationbeforetheHon'ble Supreme Court.

16. In the given facts and circumstances, this Bench is of the considered opinion that unless and until we do not timely dispose of matters which are squarely covered by the decision of this court and which stands fortified by the decisions of the various other High Courts on the very same issue, the pendency of this High Courtwouldfurtherbeburdenedwhichotherwisecanbedecided and disposed of as a covered matter' 17 . So far as the interest of the Revenue is concemed, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs ( 16 \ 36,37 and 38 of the order which, for ready refereu.re, is reproduced hereunder:

36. For all the aforesaid reasons, the impugn:rd notices issued and the proceedings drawn by the re:;pondent- Department is neither tenable, nor sL stainable. The notices so issued and the procedure ado;rted being per se illegal, deserves to be and are acccrlingly set aside/quashed. As a consequence, all the npugned orders getting quashed, the consequential orde's passed by the respondent-Department pursuant to tho notices issued under Section 147 and 148 would i-:lso get quashed and it is ordered accordingly. The i-eason we are quashing the consequential order is on the :rrinciples that when the initiation of the proceedings i:self was procedurally wrong, lhe subsequent orders zllso gets nullifi ed automatically.

37. The preliminary objection raised by lhe petitioner is sustained and all these writ petitions stands allowed on this very .iurisdictional issue. Since the impugne,-.j noticeb and orders are gefting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitionr:r which stands reserved to be raised and contendel in an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in .le case of Ashish Agarwal, supra, as a one{ime rneasure exercising the powers under A(icle 142 of the Constitution of lndia, permifted the Revenue to oroceed under the substituted provisions, and this Court ?llowing the petitions only on the procedural flaw, ttte right t7 confered on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra.

18. We would only further like to make observations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy (l supra) IS subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, I preferred by the Income Tax Department, we make 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 High Court in the case of Kanakala Ravindra Reddy (l supra). This, in other words, would mean that either of the parties, if they so want, may 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 on the very same issue.

19. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction ts concemed. As a consequence, the impugned notice under challenge under Sections 148-4. and 148 stands set aside/quashed. t 18 \] The consequential orders, if any, also stand set lsideiquashed in \ similar terms as have been passed by this High Co.rn in the case of Kankanala Ravindra Reddy (l supra). There sh;rll be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed //TRUE COPY// SD/-P. PONNA KRISHNA ASSISTANT REGISTRAR SEEkorr,.=* / To, 'l . Assessment Unit, National Faceless Assessment Cenlre, lncome Tax Department, Ministry of Finance, Room No. 401 ,2nd Filoor, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 1'10 003.

2. The lncome Tax Officer, Ward - 'l , lncome Tax Office Rajeev Gunt, Rajiv Chowk, Near Kinnerasani Theatre, Khammam - 507001.

3. One CC to SRI A V RAGHU RAM Advocate IOPUCI 4. One CC to Ms. BOKARO SAPNA REDDY (Jr. SC FOFI INCOME TAX) toPUCl 5 KKS GJP Two CD Copies o , t HIGH COURT DATED:0210512025 \,....\ ..,/ 26 5r' mm '\'' .\ --..j,. ORDER WP.No.29690 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS ,r{