PRIMARY AGRICULTURA CO OPERATIVE SOCIETY LIN/ITED v. 'l . The lncome Tax Officer ward '1

ORDER, (per llon'ble Sri Justice P.Sam Koshy) Heard Mr. T.Chaitanya Kumar, learned counsel for the petitioner and Ms.J.Sunitha, leamed Junior Standing Counsel lor the Incomc Tax Departrrent tbr the respondents. Perused the record.

2. This is a rvlit pctition whcre the proceedings are either challenged to the notices which were issued under Section 148A and 148 of the Income'fax Act, 1961 (for short'the Act') or the asscssment orders thosc have been passed under Section I47 of the Act which have been assailed.

3. This writ petition is being Laken up today only on one of t[.re grounds, that the notices issued under Section 1484, 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 Income Tax Act by way of Finance Act, 2021 w.e.f'., 01.04.2021 onwards, proceedings 2 under S,:ction 14gA of the Act as also under Section t4g of the Act ought to have also been issued and proceedrd in a faceless manner.

4. J'he contcntion of the pctitioner is tha the issue of proceedings being in violation of the Finance Acl. 202 I i.e., the irnpugned notices under Section IzlgA and Sectior l.tg of tire Act not being issued in a faceless rnan,er, have alreadl, been dealt rvith and decided by this Courl in rhe case of I(ANKANALA RAVINDRA REDDY vs. INCOME_TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions w( r.c arowed and the proceedings initiated under Section t+Sa m olso undc.r. Section 148 of the Act wer.e held to be bad with consequenti rl rclicfs on the ground of it bcing in violation of the provisior.rs o1_ S:ction I 5 I A ol the Act re,rd wirh Norificarion lgl2lz2dated 29.03.:,(.)22. The said judgment passed by this Courl has also been subsequcntly lollowed in a large number of writ petitions which were alloried on similar terms. ' K2023) 156 taxnrann.con.r I 78 (Tclangana)l 3

5. Down the [ine, we find that the same issue has also been decided against the Revenue by various High Courls i.e., by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., VS. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA3, Punjab and Haryana High Courl in the case of JATINDER SINGH BANGU vs. UNION OF INDIAI, 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 ANILKUMAR SHAH VS. INCOME TAX OFFICBR' 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 ol MANSUKHBHAI t lzoz+1464 ITR 430 (Bom) 'l(2024) 156 taxrnann.com 478 (Gauhati)l ^ l(2024) 165 taxrnann.com 1 l5 (Punjab & Haryana)l ' 12024) 167 taxmann.com 4 1 I (Telangana)l "[2024) 166 taxmann.com 679 (Bombay)] ' [2024) 165 taxmann.com I l3 (Himachal I']radesh)l 4 DAHYABHAI RADADIYA vs. INCOME TI\x OFFICER, WARD 3(3X5)8, Jharkand High Court in thc ci sc of SIfyAM SUNDAR SAW vs. UNION OF INDIAe, Ra.iasthr,n High Courr in the case ol SI{ARDA DEVI CHHAJER vs. TNCOME TAX OFFICER & ANOTHER and batch of u,rit peririonsr0 rvhich stood decided on 19.03.2024. Sirnilar views have also been takcn by the Division Bench ol Calcutta High Court in thc case of GIRDH,{R GOPAL DALMIA vs. UNION OF INDIA & OIIS (M.A.T 1690 of 2023), decided on25.09.2024. 6 Even though the same issue having been de,:ided by a large number of High Courls, we are still confronted rvirh large filing of identical matters on daily basis rangine betwee:t .i to I 0 rvrit petitions. That upon the instructions bcing scLreht fi.orr thc Department, they have been taking a solitary i r.ound that the decision of the Bombay High Court in the casr. <tf lle:tnx,ure Technologies Ltd., (2 supra) as also the one v,,hich has been decided by this Court in the case of Kanakalo tr'at,indra Retldy 8202q SCC Online Guj 4012 '2025 SCrl Onl-ine Jhar 287 12023 : R.J-JD:4984-DBl I o 5 (l supra) has been subjected to challenge in a Special Leave Petition i.e., SLP No.3574 ol 2024 before the Hon'ble Supreme Couft and the Hon'ble Suprcme Courl is seized of the matter. In addition, there are about 1200 SLPs atso filed arising out of the same issue being decided by various High Coutts.

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

8. On the one hand, everr though the order of this Court that was passed as early as on 14.09.2023 and more I 6 months have lapsed, till date, we do not find any remedial steps having been taken by the Income Tax Deparlment to take appropriate steps to either hold back issuance of notice under Section 148A and under Section 148 of the Act by the jurisdictional Assessing Officer, rather the authorities concerned in the teeth of series of decisions 6 by all the rnajor High Courts in India are :oritinrurusll, 51ill initiating proceedings under Section I4gA of ht Act and also initiating proceedings trnder Section l4g rl. the Act in contravention to the amendrnents brought into tht Incorre Tax Act pursrrant to the Irinance Act,2020 as also the Fina rcc Act 2021 . 9' Llpon a query being put as to why can,t this rvrit petition be disposed of in the teeth o1- the clecision rendered bv this Court in the case. of Kanakdo Ravintlra Reddy (1 supra). leamed Standing Counsel for the Inconre Tax Depaftment contends ritat those would unnecessar.ily burden the Income Tax Depaftnrcnt wher.e they would be required to file equal ,r*.,0., of S,L.l,s befbr.e rhe Hon'ble Suprerne Court and it would be lurthe r burdening the exchequer of the Union of India. It was also the (.ontention ol. the learned Standing counsel that no prejudice would rrc caused to thc interest of the petitioners in case ilthis writ petitiorr is kept pending till the finalization of the SLPs pending befor.e the Hon,ble Supreme Court and the fact that the petitioner is i,lrcady enjoying the benefit of interim protection. Nonetheless, on ht_ car.lier query of this Court as to why the lncome Tax Depaftment have not come out with a mechanism to issue appropriate instt.urtir)ns or lo take ', 7 appropriate steps in ensuring that proceedings under Section l4EA of tl.re 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 learned Standing Counsel that the said steps can only be taken at the level of CBDT as any such steps would have to be taken Pan India and cannot be limited to any of these jurisdictional High Coults.

10. As a result of wl-rich, what we are lacing is steep increase ol litigation day in and day out cven 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 of Section I 5 I A of the Act and as a lesult by now, more than 600 to 700 petitions have been already got pited up before this High Court on an issue which otherwise stands squalely covered by the judgment of this Courl in the case of Kanakula Ravindra Redd1, ( I 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 Bench while reserving the right of the Revenue, has also protected thc interest of the petitioners 8 insofar as the liberty which was granted to th: Revenue lor initiating fresh proceedings strictly in accordance u' th the amenclcd provisions of thc Act, as amended by the Fir.rancc r\ct, 2020 and the Financc Act. 2021. -the petitioner assessee wou d be cntitlecl to challenge or raisc the other legal ob.jections if the R:r enuc initiatt-s fresh proceedings. The Department has made n r ondeavour availing thc said Iiberty that was reserved for the R:r.cnue. On the contrary., they have been still sticking on to the st rnd, w.hich this Higl'r Court as wcll as rnany other High Courls alr.:arly held to be t 1. lt appears that because of the aforesaid liberrl, rhat this I Iigh Couft had granted pennitting the Revenue for initiating fr.esh proceedings as a one-time measure in a facele;s lnanner, the lncome 1'ax Department wants to take advantage ol'the same by protractirLg these proceedings which would enablc t tern to rneet tlre limitatiorr that would otherwise come in the way. .ikewise. if the writ petition is kcpt pending for a consider.able lon1l period of tinre and finalty at a later stage if the Hon,ble Supr.eme Court confirms the decision taken by this High Couft as also by the other High Courts in which the SLps are still pending, tLre Incorne Tax 9 Department would get the advantage of the liberty that is otherwise protected in favour of the Revenue for initiation of fresh pr:oceedings from the disposal olthese 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 ol the assesses are concerned. As a consequence, the Income Tax Department gets an extended period ol time for initiation of fresh proceedings

12. The alarming trend of docket explosion in this Court, despite the clear precedent set in Kanakala Rsvindra 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 unnecessarily. The Deparlment's strategy of awaiting the Supleme Court's decision on pending SLPs while continuing to initiate tiesh proceedings appears to be a' calculated move to buy time and circumvent limitation periods, rather than adhering to the established legal 10 position. Such conduct raises serious questions about the administlative elficiency and the respect tbr judiciul pronouncements, particularly when this Court has alrcady providcd a balancr:d altproach by preserving both the Reve ruc,s rights and assesscs tnterests.

13. Another aspect which needs to be considered is that in fact it should h:Lve beeu realized by the rncome Tax [)epar trnent itself and sirould have lbund out via media in ensur.ing tlrar proceedings under Sections 148-,4 and 148 should not have b:eu issued in a f-aceless rnaltncl', at least till the Hon,ble Supreme (,ourt decide the twelve hr-Lndrcd (1200) odd SLps rvhich it is alreadl scizecl of or. at least the lncorne Tax Deparlment should have frund out sonre rcrnedial stcps to cnsure that wherever the authorities iutenrl to initiatc p'ocecdings under Sections 14g-A and l4g. other.tha. in a laceless manner, the proceedings should have bcen deferr.ed without precipitating the matter further intimating t re assessee [hat thcy shall initiate appropriate proceedings only after rhe SLp,s ar.e decided by the Hon'ble Supreme Court on the vt,r.r, sarne issue. This agaitr, the Income Tax Department, has not been able to give a convincing reply, except for the fact that such a d:cision if at all ) .) t1, 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 struggting to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this Iligh Court resulting in flling of hundreds of ncw writ petitions which in the long run not only affects the disposal of the writ petitions but also consumes substantial time of the Bench ln hearing these rnatters again and again on daily basis. Admittedly, in spite of the n.ratter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Supreme Couft which is seized of the matter has been reluctant in granting any interim protection to the lncome -lax Department. Yet, the authorities concerned at the State level are not ready to accept the verdict passed by a majority of High Courls 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 148-A and 'I 72 I.18 thrrrugh the .jurisdictional Assessing Olhcer. rvher.eas it ought to havc been only in the faccless tnanner. l,4. Irr tlre case of BANK OF INDIA vr. ASSISTANT COMMISSIONER, INCOME TAXIT, on an isstLe whether iI u,as justifiable o. thc part or the Income Tax Deoartment in not following an order passed by the adjudicating ar-rthority only on the ground thal the appears are pending, the Divisir,, Bcrch or thc Fligh Courr ol'Bornbay helcl at paragraph No.25 as uuder. r,iz., : "25. l\,4r. paridwalla has righfly drawn out att(,ntion to the decrsion of this Court in Commissioner of lncome lax vs. Smt. Godavaridevi Sarafl2 as also the r@ent decision of the co- ordinate Bench of this Court in Samp Furniture (p) Ltd. v. lTOr3 of which one of us (Justice G.S. Kulkarni) was a men,ber, wherein the Court categorically observed that the Revenut, having not "accepted' the ludgment of the Htgh Court would not .nean that till the same ts set aside in a manner known to law, it would loose tts bind ng force. Referring to the decision of the Suprr:me Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.i4, the coud observed that the approach of the officiars of Revenue of treating decisrons being,,not acceptable,, was criticized by the Supreme Court. ln such decision, following are the relevant obs€rvations made by the Supreme Court. ]l Ilr^qli, il.lrxnri,nn.corn 422 tBombay)J " |19781 IB IIR 589 (Btrrnbay) ','^ [1024] 165 raxmann.corn 5g l/300 Taxman 452 (Bom ralJ 'o llOgZl taxmann.conr 16155E,LT433 (SC) 73 "6. Sri Reddy is perhaps right rn saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correetness or otherwise of their conclusion or of any factual malafides but wrth 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 of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. lt cannot be too vehemently emphasized that it is of utmost importance that, in 6isposing of the quasijudicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellte Collector is bindrng on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorilies should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. lf this healthy 14 rule is not followed, the result will only be undue harassment to assesses and chaos in adminis tration of tax laws.

12. We have dealt with this aspect at some ength, because it has been suggested by the loarned Additional Solicitor General that the obsen,ations made by the High Court, have been harsh ,rn the officers. lt rs clear that the observations of th _. High Court, seemingly vehement, and apprrenfly unpalatable to the Revenue, are only intended 1o curb a tendency in revenue matters which, rf allor red to become widespread, could result in consic erable harassment to the assesses-public without any lenefit to the Revenue. We would |ke to say that the department should take these observations in the proper spirit. The observations bf the High Court should be kept in mind in future and the utmost .egard should be paid by the adjudicating authorities and the appellate authorities to the requirements of .udicial discipline and the need for giving effect to the orders of the higher appellate authorities which are t,inding on thell."

15. What is rvorrying this Bench more is tt e lact that an endeavour is bcing made whoie heartedty to cnsure not to generate further litigation on issues rvhich havc been laid tc, rest by a large nurnber ol I Iigh Coults all of whom have taken a jotlsistent stand that the action ol thc Incorre Tax Department being violative of the 15 Finance Act,2020 and Finance Act,202l. Now, in order to protect tl-re interest of the Revenue as also that ol the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal of the instant writ petition in tenns of the judgment rendered by this High Court in the case of Kankanala Rtvindra Reddy (l supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Depaftrnent and which is pending consideration before the Hon'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 rvliich are squarely covered by the decision of this Courl and which stands fortifled by the decisions of the various other Iligh Courts on the very same issue, the pendency of this High Cor-rrt would further be burdened which otherwise can be decided and disposed ol as a covered matter. 17 . So far as the interest of the Revenue is concemed, we are of the oonsidered opinion that the interest of the Revenue has already been consideled and protected, as has been observed in paragraphs 76 36,37 and 38 ofthe order which, for ready reference. is reproduced hereunder

36. For all lhe aforesaid reasons, the impugnr:d notices issued and the proceedings drawn by the respondent- Department is neither tenable, nor sLStatnable The notices so issued and the procedure ado6 ted being per se illegal, deserves to be and are accorJingly set aside/quashed. As a consequence, all the mpugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 14g would tlso get quashed and it is ordered accordingly. The rr)ason we are quashing the consequential order is on the crinciples that when the initiation of the proceedings tself was procedurally wrong, the subsequent orders llso gels nullified automatically.

37. The preliminary objection raised by the p€ titioner is sustained and all these writ petitions stands a lowed on this very jurisdictional issue Since the impugned notices and orders are getting quashed on the point of jurisdrction, we are not inclined to proceed fu(her and decide the other issues raised by the petitior er which stands reserved to be raised and contendr:d rn 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 tc proceed under the substituted provisions, and this Court allowrng the petitions only on the procedural flaw, :he right 17 conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Aganrual, supra

18. We would only fuflher 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 Kantkdo Rsvindra Reddy (l supra) is subjected to challenge belore the llon'ble Supreme Court in SLP No.3574 of 2024, prefen'ed by the Income Tax Deparlment, we make it clear that allowing of thc 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 Konakolu Rwindra Reddy (l supra) This, in othel rvords, would mean that either of the parties, if they so want, may lnove an appropriate petition seeking revival of this writ petition in the light of the decision of the Hon'ble Supreme Court in the pendir.rg SL[) on the very same issue. t9 . Accordingly, the instant writ petition stands allowed in I'avour ol the assessee so far as the issue of jurisdiction ls concemed. As .a consequence, the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed' { 18 The corrsequcntial orders, if any, also stand set rsideiquashcd in similar lerms as have been passed by this High CoLrrl in the case of Konkanolo Rovittdra Retltt.y (l supra). There shall be no order as to costs. C,cnsequently, miscellaneous petitions pending, if any, shall stand closed. ,TRUE COPY// SD/. A.I-I.S. GOWRI SHANKAR AS:;ISTANT REGISTRAR secrbPorrrcrn / 50410'1 , -lelangana

1. The lncome Tax Officer ward '1 , Nirmal/ NIRIVAL, NlRl/AL, Telangana, 2. The Principal Chief Commissioner of lncome Tax -, Telangana and A.P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hydt:rabad - S00 028, Telangarra. State.

3. The Natbnal Faceless Assessment Cente?, lncome T:rx Department, New 4. The Chairman, Central Board of Direct Taxes, Departrnent of Revenue, Delhi. Ministry of Finance, Government of lndia, Secretariat tiuildings, New Delhi - 1 10 001. Ministry of Finance, New Delhi - 1 10 001 .

5. The Secretary to the Government, Union of lndia, Departrnent of Revenue, 6. One CC to SRI THANNERU CHAITANYA KUMAR, A(tvocate tOpUCl 7. One CC to lt4s J.SUNITHA (JUNIOR SC FOR tNCOtVE TAX) Advocite To I I [oPUC] B. Two CD Copies a \ SA GJ , i I ,/s i,-,' .'/-J :i ) i.,.) n 10 stP 2m /.:- \- -""',,' ,. ,.,/ I t i I I HIGH COURT DATED:01 10512025 ORDER WP.No.31359 of 2024 ALLOWING THE W.P WITHOUT COSTS. \\ L