Primary Agriculture Cooperative So v. or asst. year

petitioner and Mr. K. Sudhakar R dy, leamed Senior Standing Counsel for the Income Tax Dep ent for the respondents. Perused the record.

2. This is a writ pptition whe the proceedings are either challenged to the notices which we issued under Section l48A and 148 of the Income Tax Act, 196 (for short 'the Act') or the assessment orders those have been assed under Section 147 of the Act which have been assailed

3. This writ petition is being tak up today only on one of the grounds, that the notices issued und r Section l48A of the Act and the subsequent initiation of proce ings under Section 148 of the Act by the jurisdictional Assessi Officer, 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. 02t onwards, proceedings under Section 148.4 of the Act as also under Section 148 of the Act ought to have also been issued and proceeded in a faceless ! manner.

4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Acq202l i.e., the impugned notices under Section 148A and Section I48 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 initiatod 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 l A of the Act read with Notification 1812022 dated29.O3.ZO22. The said judgment passed by this Courl has also been subsequently followed in a large number of writ petitions which were allowed on similar terms. 'l(2023) 156 taxmann.com 178 (Telangana)l I J

5. Down the line, we find that e same issue has also been decided against the Revenue by vanous High Courts i.e., by the Bombay High Court in e case of HEXAWARE TECHNOLOGIES LTD., vs. ASS STANT COMMTSSIONER OF INCOME TAX & OTHERS2, auhati High Court in the case of RAM NARAYAN SAH vs. UNI N OF INDIA3, Punjab and Haryana High Court in the case of J TINDER SINGH BANGU vs. UNION 0F INDIA4, and Telan a High Court in the case of SRI VENKATARAMANAREDD PATLOOLA vs. DEPUTY COMMISSIONER OF' INCOME AXs where the issue was in respect of intemational taxation, Bom ay High Court in the case of ABHIN ANILKUMAR SHAH vs. COME TAX OFFICER, INTERNATTONAL TAXATTON6 ich is again on international taxation and central circle, High Cou of Himachal Pradesh in the case of GOVIND SINGH vs. IN OME TAX OFFICBRT ) Gujarat High Court in the ca e of MANSUKHBHAI ' Tzoz+1464 ITR 430 (Bom) 'l(2024) 156 taxmann.com 478 (Gauhati) ^ l(2024) 165 taxmann.com I 15 (Punjab '12024) 167 taxmann.com 4l 1 (Telang " 12024) 166 taxmann.com 679 (Bombay)l ' [2024) 165 taxmarm.com I 13 (Himachal Haryana)l l adesh)l ) 4 -\ l : I I i DAITYABHAI RADADIYA vs. INCOME TAX OFFICER, 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 petitionslo 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 GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024.

6. Even though the same issue having been decided by a large number of High Courts, we are still confronted with large filing of identical matters on daily basis ranging between 5 to 10 writ petitions. That upon the instructions being sought from the Department, they have been taking a.solitary ground that the decision of the Bombay High Court in the case of Hexaware Technologies Ltd., (2 supra) as also the one which has been decided by this Court in the case of Kanakala Ravindra Reddy '2024 SCC Online Guj 4012 "2025 SCC Online Jhar287 'o 72023 : RJ-JD :4984-DBl ,/ (1 supra) has been subjected to c lenge in a SPecial Leave Petition i.e., SLP No.3574 of 2024 before the Hon'ble SuPreme Court and the Hon'ble SuPreme C urt is seized of the matter. In addition, there are about 1200 SL s also filed arising out of the same issue being decided by various igh Courts.

7. To a query being Put to the Ie ed counsel for the Revenue, they have categorically accepted th fact that there is no lnterlm order granted bY the Hon'ble Su reme Court in anY of these matters pending before it.' Mean hile, fresh writ Petitions of identical nature are beihg piled up b fore this Bench on dailY basts and the pendencY is getting incr on matter which otherwise has already been dealt and decided b this very High Court itself.

8. On the one hand, even thou h the order of this Court that was passed as earlY as on 14.09'2 23 and more 16 months have lapsed, till date, we do not hnd y remedial stePs having been taken by the Income Tax DePartm t to take aPpropriate steps to either hold back issuance of notice der Section 148A and under Section 148 of the Act bY the ju ctiona|,{s sessing Officer, rather the authorities concerned in e teeth of series of decisions .i 6 by all the major High Courts in India are continuously still initiating proceedings under Section 148A of the Act and also initiating proceedings under Section 148 of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Act 2021' g. Upon a query being put as to why can't this writ petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravinclru Reddy (| supra), learned Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to file equal number of SLPs before the Hon'ble Supreme Court and it woutd be further burdening the exchequer of the Union of India' It was also the contention of the learned Standing Counsel that no prejudice would be caused to the interest of the petitioners in case if this writ petition is kept pending tillthefinalizationofthesLPspendingbeloretheHon,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 ,l appropriate steps in ensuring that p ceedings under Section 148A of the Act as also the assessment ders under Section 148 ofthe Act are kept in a hold in the light o the decisions dedcided by the various High Courts, it was subm tted 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 aken Pan India and cannot be limited to any of these jurisdictional igh Courts.

10. As a result of which, what w are facing is steep increase of litigation day in and day out even ugh various orders have been passed by this High Court allowing t petitions on the very same issue. The Income Tax authorities c ncemed are still even now in 2025 also initiating proceedings in ntravention to the provisions of Section i51A ofthe Act and as result by now, more than 600 to 700 petitions have been already ot piled up before this High Court on an issue which otherwise tands squarely covered by the judgment of this Court in the case f Kanskala Ravindra Reddy (1 supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kanakala Ravindra Reddy (1 supra), the Division Ben while reserving the right of the Revenue, has also protected e interest of the Petitioners I ,6 Sr&l!;;*.*x;'- 8 insofar as the tiberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Finance Act' 2020 and the Finance Act,202l'The petitioner assessee would be entitled to challenge or raise the other legat 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' whlch this High Court as well u'rlruny other High Courts already held to be bad.

11. lt appears that because ofthe aforesaid tiberty that this High Court had granted permitting the Revenue for initiating fresh proceedings as a onetime measure in a faceless manner' the Income Tax Department wants to take advantage of the same by protracting these proceedings which would enable 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 conhrms thedecisiontakenbythisHighCourtasalsobytheotherHigh are still Pending, the Income Tax Courts in which-the SLPs /./ /. 9 Department would get the advantag of the liberty that is otherwise protected 1n favour of the Rev ue for initiation of fresh proceedings from the disposal of th e matters at a much later stage which would be advantageous and eneficial to the Revenue and would be equally disadvantageous a d detrimental so far as interest of the assesses are concemed. As a consequence, the Income Tax Department gets an extended perio of time for initiation of fresh proceedings.

12. The alarming trend of docket plosion in this Court, despite the clear precedent set in Kanakala avindra Reddy (1 supra), ts a matter of grave concern. The Inco e Tax Department's persistent initiation of fresh proceedings, disre arding the established judicial pronouncements, has led to an un ecedented surge in litigation with over 600-700 petitions piling up on the same issue. This deliberate approach not only unde ines the principle of judicial precedent but also strains the judici resources unnecessarily. The Department's strategy of awaiting th Supreme Court's decision on pending SLPs while continuing initiate fresh proceedings appears to be a calculated move buy time and circumvent limitation periods, rather than adh ng to the established legal 10 i. position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncements, particularly when this Courl has already provided a balanced approach by preserving both the Revenue,s rights and assesses tnterests 13' Another aspect which needs to be considered is that in fact it should have been realized by th! Income Tax Department itself and should have found out via media in ensuring that proceedings under Sections 148-4 and..l4g should not have been issued in a faceless manner, at least till the Hon,ble Supreme Court decide the twelve hundred (1200) odd SLps which it is already seized ofor, at least the Income Tax Department should have tbund out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections l4g-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 Income Tax Department, has not been able to give a convlncrng reply, except for the fact that such a decision if at ail ./ ./ ,/.. 11 has to be taken, has to be taken for the whole of India, and which otherwise has to be by way of a pol cy decision and that too at the level of Central Board of Direct Taxes. Though the leamed Standing Counsel for the Income T Department contended that the Delhi High Court dismissed a t pelition of similar nature, on the one hand when the High Cou is struggling to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to ock the doors of this High Court resulting in filing of'hundreds f new writ petitions which in the long run not only affects the dis osal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily bas S Admittedly, in spite of the matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Suprem 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 th verdict passed by a majority of High Courts of different States on the same issue; and to make things further worse, the Income ax Department is showing audacity by issuing notices continuou ly unde@tions 148-4 and -t2 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. ASSISTANT COMMISSIONE& TNCOME TAXII, on an issue whether it was justifiable on the part of the lncome Tax Department in not following an order passed by tlre adjudicating authonty only on the ground that the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz., : "25. Mr. Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafl2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) Ltd. v. lTO13 of which one of us (Justice G.S. Kulkarni) was a member, wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not mean that till the same is set aside in a manner known to law, it would 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. ln such decision, following are the relevant observations made by the Supreme Court. " 11zozs) 170 taxmann.com 422 (Bombay)l '' 119281 113 ITR 589 (Bombay) " TzOz+1165 taxmann.com 58i/300 Taxman452 (Bombay) 'o TtggZltaxmann.com 16155ELT 433 (SC) .,.. 13 "6. Sri Reddy is perhaps ri officers were not actuated passing the impugned o genuinely felt that the claim o tenable and that, if it was would suffer. But what Sri Re are not concerned here wi otherwise of their conclusi malafides but with the fact that ht in saying that the y any mala fides tn They perhaps rS the assessee was not ccepted, the Revenue dy overlooks is that we the correctness or n or of any factual the officers, in reaching in their conclusion, by-ppssed two appellate orders in regard to the same issue wh h were placed before them, one of the Collector ( peals) and the other of the Tribunal. The High Court as, in our view, rightly criticized this conduct of the sistant Collectors and the harassment to the assess of these officprs to give e authorities higher to them in th cannot be too vehemently e utmost importance that, i quasijudicial issues before th caused by the failure to the orders of appellate hierarchy. lt phasized that it is of disposing of the , revenue olficers are bound by the decisions of th appellate authorities. The order of the Appellte Coll ctor is binding on the Assistant Collectors working hin his jurisdiction and the order of the Tribunal is bin ing Jpon the Assistant Collectors and the Appellate ollectors who function under the jurisdiction of the Tri unal. The principles of judicial discipline require that t e orders of the higher appellate authonties should followed unreservedly -by the subordinate authorities order of the appellate authori the department - in itself an and is the subject matter of a ground for not following it u been suspended by a compe The mere fact that the is not "acceptable" to bjectionable phrase - appeal can furnish no less its operation has court. lft\ healthy \ 1 I I .I \i\r\t t 't4 rule 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 Solicitor General that. the observations made by the High Court, have been harsh on the officers. lt is clear that.the observations of the High Court, seemingly vehement, and apparenfly unpalatable to the Revenue, are only intended to curb a lendency in revenue matters which, if allowed to become widespreap, 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 High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial 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 raid 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 Finance Act,2020 and Finance Act, 021 . Now, in order to protect the interest of the Revenue as also t ofthe assessee, it would be trite at this junchrre, if we dispos of the writ petition with an observation/direction that the dispo of the instant writ petition in terms of the judgment rendered by his High Court in the case of Kankqnala Ravindra Reddy (L sup ) shall however be subject to the outcome of the SLps which w re filed by the Income Tax Department and which is pending co ideration before the Hon'ble Supreme Court.

16. In the given facts and circu tances, this Bench is of the considered opinion that unless and til we do not timely dispose of matters which are squarely covere by the decision of this Court and which stands fortified by the d isions of the various other High Courts on the very same issu the pendency of this High Court would further be burdened wh h otherwise can be decided and disposed ofas a covered matter

17. So far as the interest of the Rev ue is concemed, we are of the considered opinion that the interes of the Rever#has alread v been considered and protected, as has in paragraphs 16 36,37 and 38 of the order which, for ready reference, is reproduced hereunder:

36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent- Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a 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 orde[ed accordingly. The reason we are quashing the consequential order is on the principles that when the initjation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.

37. The preliminary ob.jection 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 gefting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one{ime measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right \ t7 confered on the Revenue wo proceed further if they so want order of the Supreme Court Aganival, supra. ld remain reserved to from the stage of the n the case of Ashish

18. We would only further like to ake observations that since we are inclined to dispose of the in writ petition. conscious ol the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy (1, slpra) is subjected to challenge before the Hon'ble Supreme Court SLP No.3574 of 2024. preferred by the Income Tax.Departm nt, we make it clear that allowing of the instant wlit 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 ovindra Reddy (l supra). This, in other words, would mean that ither of the parties, if they so want, may move an appropriate peti on seeking revival of this writ petition in.the light of the decisio of the Hon'ble Supreme Court in the pending SLP on the very s e lssue

19. Accordingly, the instant writ p tition stands allowed in favour of the assessee so far as th concemed. As a consequence, the issue of jurisdiction is -. impugned notice under challenge under Sections 148-4 and I4 stands St aside/quashed. I I l i 18 The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this High Court in the case of Kankanala Ravindra Reddy (l supra). There shall be no order as \i l \ to costs. Consequently, miscellaneous petitibns pending, if any, shall stand closed. //TRUE COPY// S I. V. HARI PRASAD UTY REGISTRAR tlsEcttoH oFFlcER ''b /\ \i To, I I 2 4 q ""Jfi ,Lt r he A s se s s m e n t u n i t, ry, Ir-", #l J: "HS:i \'":.1T i* r? 3 "ii; Deoartment, Ir/linistry Pt t ;;vi;;;ir"ai iil"hru Stddium Delhi - 1 10 003' The lncome Tax Officer, Ward - 1'-lncome Tax Office 6-12-38' Ganesh iffi;i;M;i" R6io. t<otnas'dem - 507101' One CC to SRI A.V'RAGHU RAtvl' Advocate [OPUC] One CC to SRI K SUDHAKAR REDDY' Sr' SC FOR lT IOPUCI Two CD CoPies "'l BSR GJP FlL HIGH COURT DATED:0210512025 I / .-)- li .) I -, \, ..'k_ \i..,t\. li.IriG 11/{/JEM Fr ? ki cu r.g>t ORDER WP.No.29752 of 2024 ALLOWING THE WRIT PETITION, WITHOUT COSTS il- .J...4-_tul-l [%'-