High Court · 2025

Petition Under Article 226 ot lhe Constitution of lndia praying that in the circumstances dtated in the affidavit filed therewith' the High Court may be pleased to issue a writ, order, or direction more particularly in the nature of a writ of mandamus declaring the Order under Section 14BA(d) daled 3010812O24 bearing DIN ITBA/COM lFl17t2)24-25t1068178997(1) and a consequent Notice underSectionl48dated3oto}t2o24bearingDlNlTBA/CoMlFl1712024- 25t1OG8184373('1) issued by the Respondent No' 1 as being void' arbitrary' ittesat, and withotit application of mind and without iurisdiCtion and Violative Of Articles 14 and 265 of the Constitution of India and same. ,,,urcr .rno consequenfly set aside the I.A.N O:1 OF 2024 petition Under section 1 51 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay a' proc.eedings pursuant to the issuance of the Notice under section 14g dated 3O1O8t2024 bearing DtN |TBA/COM tFt.i/2024_25t1 068184373(1) issued by the Respondent No. i issued bythe Respondent No..r . Counsel for the petitioner : SRI M.NAGA DEEPAK Counsel for the Responde couNsEai6H ;i;ffiii"ilf ;HJ;ti,ill[TA, LEARNED JUNToR sTANDTNG The Court made the following ORDER THE HONOURABLE SRI JUSTICE P'SAM KOSHY AND NARSTNG RAO THE HONOURABLE Sru 'IUSTTCB NANDIKONDA WRTT PETITION No.29746 oB 2024 ORDER, (per Hon'ble Sri Justice P Sam Koshy) Heard Mr' petitioner and Ms' M.Naga Deepak, leamed counsel for the J.Sunitha, learned junior Standing Counsel for for the resPondents' Perused the the Income Tax DePartment record.

2. This is a writ petition where the proceedings are either challenged to the notices which were issued under Section 148A and 148 of the Income Tax Act' 1961 (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 148A of the Act and the subsequent initiation ofproceedings under Section 148 of the Act by the jurisdictional Assessing Officer' whereas in terms of the amendment that was brought to the Incori-eTax Act by way of Finance Lct, 2021 w'e'f', 01'04'2021 onwards' proceedings 2 under section l48A of the Act as arso under section l4g of the 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 Finance Act,202l i.e., the impugned notices under Section r4gA and Section r4g 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 14gA as also under section r48 of the Acr were herd 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 Notificarion 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 'l(2023) 156 taxmann.com 178 (Telangana)l 3

5. Down the line, we hnd that the same issriei 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 COMMTSSIONER 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. UNtoN oF INDIA4, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER Of'' INCOME TAX5 where the issue was in respect of international taxation, Bombay High court in the case of ABHIN ANILKTMAR SHAH vs' INCOME TAX OFFICER' INTERNATIONAL TAXATION6 which is again 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 2 t2o241464 ITR 430 (Bom) ' itiozil 1 56 taxmann.com 478 (Cauhati)l "iizozoj 165 taxmann.com 115 (Punjab & Haryana)l 'izozl) 1 67 taxmann.com 41 1 (Telangana)l " [2024) 166 taxmann.com 679 (Bombay)l 'ii6qi 1i5 ,u**uorr."om I l3 (Himachal Pradesh)l i DAHYABHAIT RADADIY.d vs. TNCOME TAX OFFIC.Ifl, WARD 3(3X5)8, Jharkand High Court in the case of SHyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitionsro 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 GTRDHAR GOPAL DALMIA vs. UNION OF TNDIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024.

6. Even thotrgh the same issue having been decided by alarge number of High Courts, we are still confronted with large filing of identical matters on daily basis ranging between 5 to l0 writ petitions. That upon the instnrctions being sought from the Department, they have been taking a. solitary ground that the decision of the Bombay High court in the case of Hexaware Technologies Ltd., (2 supra) as also the one which has been decided by this court in the case of Kanakara Ravindra Reddy 8zo2q scc online Guj 4012 " 2025 SCC Online Jhar 287 y2023, RJ-JD :4984-DBl 'o 4 .l 5 ,t (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 leamed 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 of 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 flnd any remedial steps having been 'fax Department to take appropriate steps to taken by the Income either hold back issuance of notice under Section 148A and under Section l48 of the Act by the jurisdictional Assessing Ofhcer' rather the authorities concerned in the teeth of series of decisions 6 by all the major High Courrs in India are continuously still initiating proceedings under Section l48A of rhe Act and also rnttrating proceedings under Section l4g of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Act202l. 9. Upon a query being put as to why can,t this rvr-it petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravindro Reddy (l supra), leamed Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Departmenl where they would be required to fire equal number of slps before the Hon'ble Supreme Court and it would be further burdening the exchequer of the Union of India. It was also the contention of the Ieamed 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 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 instructions or to take --...\ r 7 appropriate steps in ensuring that proceedings under Section 148A of the Act as also the assessment orders under Section 148 of the 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' l0.Asaresultofwhich,whatwearefacingissteepincreaseof 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 Income Tax authorities concemed are still even now in 2025 also initiating proceedings in contravention to the provisions ofSectionl5lAoftheActandasaresultbynow,morethan600 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 (l supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kanakala Ravindru Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners \GA ..1 J . insofar irs the liberty which vzas granted to the R.evenue tbr initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Financ e 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 liberty that was reserved for the Revenue. On the contrary, they have been still sticking on to the stand, which this High Court as well as many other High Couris already held to be bad.

11. It appears that because ofthe aforesaid liberty that this High court 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 wourd enabre them to meet the limitation that would otherwise come in the way. Likewise, 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 Courts in which the SLps are still pending, the Income Tax A I Department would get the advantage of the liberty that is otherwise protected in favour of the Revenue for initiation of ftesh proceedings from the disposal ofthese matters at a much later stage and beneficial to the Revenue and which would be advantageous and derimental 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 ftesh would be equally disadvantageous proceedings' t2. the clear Prec The alarming trend of docket explosion in this Court' desptte edent set \rr Kanakala Ravindra Reddy (l supra)' is a matter of grave concern 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 t'nnecessarily' 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 -!t.^| \ Y \ 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 interests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Department itselfand should have found out via media in ensuring that proceedings under Sections l4g-A and l4g should not have been issued in a faceless manner, at least till the Hon,bte Supreme Court decide the twelve hundred (1200) odd SLps which it is alreadv 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 r4g-A and l4g, 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 lncome 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 the whole of India' and which otherwise has to be by way ofa poticy decision and that too at the level of Central Board of Direct Taxes' Though the leamed Standing Counsel for the lncome Tax Department contended that the Delhi High Court dismissed a writ petition of similar nature' on theonehandwhentheHighCourtisstrugglingtoreduceits 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 hling of hundreds of new writ petitions which in the long run 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 matterbeforetheHon'blesupremeCourthavingbeentakenon 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 concerned 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 lncome Tax Department is showing audacity by issuing notices continuously under Sections 148-A and \ I i i I I I t i i \ 2 148 thrcugh the jurisdrctior:al Assessing Officer whereas it ought to have been only in the faceless manner. 14. [n rhe case of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAX1r, on an issue whether ir was justifiable on the part of the Income Tax Department in 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 of Bombay herd at paragraph No.25 as under, viz.. : "25. Mr. paridwalla ''nnt', drawn out attention to the decision of this court ,n mmissioner of rncome Tar vs. smt. "o't Godavaridevi sarafl2 as the recent decision of the co- ordinate Bench of this cour of which oneof us (.,,,,,." i.:.?:;ffi:::J::il1,lrJl, the Court categorically observed that the Revenue having not "accepted', the judgment of the High Cou( would not mean that tilt 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.r4, lhe cou( observed that the approach of the officiars 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. l, 1t111:,.,.10 glmann.com 422 (Bombay)l ' ll978l I I3 ITR 589 (Bombay) ','.120241 I 65 taxmann.com 58 l/300 Taxman 452 (Bombay) 'o 1t9921taxmann.com t6/55 ELT433 (SC) 4 1ri "6. Sri Reddy is perhapg riqht in- *Ving fr"t-tnl ;;;";, ;"r; not actuated bY any mara rides tn impugned orders They perhaps Orrr'"n "" n""r,""', felt that the claim of the assessee was not LnaOte anO that' if it was accepted' the Revenue *"r" ,rn"' But what Sri Reddy overlooks is that we are not concerned here with the correctness. or otherwise of their conclusion or of any {actual *r*r,0"" but with the fact that the ofiicers' in reaching in their conclusion' by-passed tlvo appellate orders in regard to the same issue which were placed before of the Collector (Appeals) and the other of ;;;;' """ tne triOunat The High Court has' in our view' rightly criticizea 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 autnorities higher to them in the appellate hierarchy lt cannot be too vehemently emphasized that it is of utmost importance that' in disposing of the quasiiudicial 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 iurisdiction 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 authorities 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 subiect 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 L4 rule is not followed, the re harassment to assesses unot''t of tax laws. *"' only be undue chaos in administration ! aspect at some length, ggested by the learned

12. We have dealt with I because it has been sthis Additionar Soricitor Gene made by rhe High "*-,'i:r:":";"r::T::,,il: officers. lt is clear that tht oo"u-'t'ons of the High court, seemingry ,"n.' ' and apparenfly unparatabre to the Revenue a rendency in revenue ;,:::ililt:iTil:j,f become widespread, could result in consiOerabte harassment to the assesses_public without any benefit to the Revenue. We would like to say that the depa(ment should take these observations in the proper spirit. The observations of the High Court should be kept in mind in futu shoutd be paid by the "o,ro,.'rl,lr1llil,f.'::?n: appellate authorities to the requirements of judiciat 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 observation/direction Finance Act,2020and Finance Lct'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 dispose of the writ petition with an that the disposal 0f the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Redd.y (r supra) sha, however be subject to the outcome of the SLPs which were fited by the Income Tax Department and which is pending consideration before the Hon'ble SuPreme Court'

16. ln 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 Court would further be burdened which otherwise can be decided and disposed of as a covered matter' 1'7 . 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 I 36,37 and 3g of the order which, for ready reference ts reproduced hereunder: EJ .t nor sustainabre. the Procedure adopted being be and are accordingly set all the impugned

36. For all the aforesaid r( issuedandtnep,oceeoins:a:::; jiJTJi::il:::": Department is neither The notices so issued ,no ,t"nuo'u' per se iflegar, deserves ,o aside/quashed. As a cons orders getting quashed, ,nu lo'"n""' by th e responde*-o"0"", ;:l';;:,:I,"JT: :il::: issued under Section 141 and 148 would also get quashed and it is ordered a are quashins rhe consequenti;""'#l JTJffi ;: that when the initiation of the proceedings itself was procedurally wrong, the sub sequent orders also gets nu[ified automaticaly.

37. The preliminary objection raised by the petitioner is sustained and all these writ petitions slands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point of jurisdiction, \4/e 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{ime measure exercising the powers under Article 142 of the Constitution of lndia, permifted the Revenue to proceed under the substituted provisions, and this Court alowing the petitions only on the procedural flaw, the right (' 1 -l4r t7 conferred on the Revenue would remain reserved to pro"""U further if they so want from the stage of the the Supreme Court in the case of Ashish ", "* Agarwal, suPra-

18. We would only further like to make observations that stnce 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 chatlenge before the Hon'ble Supreme Court in SLP No'3574 of 2024' preferred by the lncome Tax Department' we make it clear that atlowing of the instant writ petition is subj ect to outcome of the aforesaid SLP preferred by the Revenue against the decision of this High Court in the case of Kanakala Ravindra Red'dy (1 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 wtit petition in the light of the decision of the Hon'ble Supreme Court in the pending SLP on the very same issue' I I

19. Accordingly, the instant writ petition stands allowed lavour of the assessee so far as the issue of jurisdiction concemed. As a consequence' the impugned notice under challenge under Sections 148-4 and 148 stands set aside/quashed' IS 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 Kankanula Ravindra Reddy (1 supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed //TRUE COPY// SD/- N, CHANDRA SEK DEPUry RE HAR RAO ISTRAR \ To SECTI N OFFICER 1 . The Assistant Commissioner of lncome Tax, Circle S( 1 ). Hyde rabad. ' Il:i=:Tnt Director or tncome iax, il"".i""ffiloDADrr INV Hyd 2(a), Director of lncome rax, Investisation, DD/ADrr rNV Hyd 2(a), ' Iffi"?:i::I 4. The Assistant Commiss. ,,;nllh:;::ffi :i:::::",lHi&XL?;?"#;1,,.i,8:#lhIIf "^[f , 6. One CC to SRt [\4.NAGA,?EF|AI, Advocate tOpUCl 7. one cc to Ms. J.suNtrHA, LEARNi;iuN;d;.slon,Nc couNsEL FoR . INcoME TAX DEPARTMer.rr ropuii B. Two CD Copies SA GJ 6 HIGH COURT DATED:02 tOSt2O2S I I \ (. OB SEP Iffi ;I ir' ORDER ijf S.,. ,-1\E(') WP.N o.29746 of 202i ALLOWING THE W.P WITHOUT COSTS.