J by rh.ts Court in the case RAVINDRA REDDY v. INC,ME-TAx KANKANALA on r

Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus , declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre) completed the assessment U/S 147 r.w.s 144 Date of 28-03-2024, DIN ITBA/AST/S/14712023- 2411 063585367 (1) for the Assessment Year 20'18-19 determining the total rncome of Rs. 4,36,05 ,2261_ as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio' viorative of the principles of naturar justice apart from being violative of Artictes la, rc()@) and 265 of the Constitution of lndia & Sec. .148A of the lncome Tax Act, 1961, and consequen y set aside the same in the interests of justice lA NO: 1 OF 2024 Petition under Section 151 cPC praying that in the circumstances stateo in the affidavit fired in support of the petition, the High court may be preased to suspend the order Under section 147 r.w.s 144 Date of 28_03_2024, DIN IrBA/AST/S/14712023-24/10635S5367(1) for the Assessment year 2018_19 determining the totar income of Rs. 4,36,05 ,226r- and Demand notice u/s 156 0f the Income Tax act 1961, vide DrN and Notice No. rrBA/AST/s/15 612023- 24/1063585444(1) Dt. 28-03-2024 for the assessment year 2018-19 pending disposal of the above Writ petition Counsel for the petitioner: SRl. THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos. 1toS: Ms. J. SUNITHA counserrortheRespondentruo.o:snrlJeuXJ?F-"^"rEEft ,,|rffi .*, The Court made the following: ORDER DY. SOLICITOR GENERAL OF INDIA I THE HONOURABLE SRI ruSTTCE P'SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITIO N No.3l 435 of2024 ORDER, (per Hon'ble Sri Justice P Sam Koshy) Heard Mr. T'Chaitanya Kumar' learned counsel for the petitioner and Ms.J.Sunitha, learned Junior Standing Counsel for the Income Tax Department for the respondents' Perused the record. l'his is a writ petition where the proceedings are either 2. challenged to the notices which were issued under Section 1484 arrdl48ofthe[ncome.I.axAct,1961(forshort.theAct,)orthe assessmentordersthosehavebeenpassedundersectionl4Tof thc Act which have been assailed'

3.Thiswritpetitionisbeingtakenuptodayonlyononeofthe grounds, that the notices issued under Section 148A of the Act and the subsequent initiation of proceedings under Section 148 of the Act by the jurisdictional Assessing Officer' whereas in terms of the amendment that was brought to the lncome Tax Act by way of Finance Act, 2O2l w'e.f., 01'04'2021 onwards' proceedings 2 -\r\i under Section l4gA ofa Act ought to have llranner. ",." on Act as also under section 148 of the ,een issued and proceeded in a faceless

4. Thc coutention of the petitioner i s that the issue of proceedings being . tn violation of the Financ e Act, 2021i.e., the impugned norices under Section 14gA andSection I4g ofthe Act not being issued in a faceless manner, have already been dealt with and decide<J by rh.ts Court in the case , RAVINDRA REDDY vs. INC,ME-TAx ; KANKANALA on r4.09.2023wh6rebv oFFrcERr decidec, n h.,!--L :"':-'^^ a batch of writ petitions were allowed and "t Section 1484 as also under section be bad with consequential the proceedings initiatr r4g of the Act were n", reliels on the ground of it being in vi< the provisions of Section I5rA of rhe Act read with *o,,0:''"o'of dated 29'03'2022' The said judgment passed by ,n,, f"o' .18/2022 Court has also been subsequently followed in a Iarge number of writ petitions which were allowed on similar telms. '[(20n) i56 raxmann.corn l7g (l.elangana)] (

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 TECHNOLOGIBS LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA3, Punjab and I{aryana High Court in the case of JATINDER SINGH BANGU vs. TJNION 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 ANILKUMAR SHAH 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. TNCOME TAX OFFICERT, Cujarat Lligh Court in the case of MANSUKIIBHAI 'lzoz+1464 ITR 430 (Bom) 'l(2024) 156 taxmann.com 478 (Gauhati)l " 1Q024) 165 taxmann.com I l5 (Punjab &Haryana)l '[2024) 167 taxmann.com 4l I (Telangana)] "l2\24l 166 taxnann.com 679 (Bombay)l '12024) 165 taxmann.com I l3 (Himachal Pradesh)l : *--i 'l 4 DAHYABHAT RADADIYA vs. INCoME TAX OFFICER, WARD 3(3X5)8, Jharkand High Court in the case of SHyAM SUNDAR SAW vs. UNION OF INDIAT, Rajasthan High Courr in . the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHBR and batch of writ petitionsr0 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 TNDIA & ORS (M.A.T 1690 ol 2023), a".iA.a on 25.09.2024. 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 I 0 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 Kanakalo Ravirtdra Retldy 12024 SCC Online Guj 40 t 2 '2025 SCC Online Jhar 287 to y2023 : RJ_JD:4984_DB I 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 Court and the Hon'ble Supreme Court is seized of the matter' In addition, there are about 1200 SLPs also hled arising out of the 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 I lon'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 thc one hand, even though the order of this Court that was passed as early as on 14'09'2 023 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 hotd back issuance of notice under Section 148A and under Section 148 of the Act by the jurisdictional Assessing Officer' ra[her the authorities concemed in the teeth of series of decisions I \ 6 by all the ma..1or High Courts in lndia are continuously still initiating proceedings under Secrion l48A of the Act and also initiating 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 Act 2021 . 9. Upon a query being pur as ro why can,t this writ petition be disposed of in the teeth of the decision rendered by this Courl in the case of Kanakala Rovindra Rertd.y (l supra), leamed Standing Counsel for the Income Tax Deparlment contends that those would unnecessarily burden the Income Tax Deparlment where they would be required to fire equar number of SLIrs before the Hon'ble Supreme Court and it would be further burdening the exchequer of the Union of Inclia. [t was also the contention of the leamed Standing counsel that no prejudicc would be caused to the interest of the 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 Deparlment have not come out with a mechanism lo issue appropriate instructions or ro gke 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 learned Standing Counsel that the said steps can only be taken at the level ofCBDT 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 Income 't'ax authorities concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 1 5 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 Roindra 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 Bench while reserving the right of the Revenue, has also protected the interest of the petitioners l : \l\ 8 insofar as the liberty which was granted to the Revenue for rnitiating fresh proceedings strictly in accordance r.r,ith the amended provisions of the Act, as antended by the Finance 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 sta,d, which this High court as well as many other High courts arready herd to be rty thar rhis High manner, the initiaring

11. It appears that because of the aforesaid libe Court had granted permitting the Revenue for proceedings as a one_time measure rn a face.less Income Tax Department wants to take advantage of the same by protracting these proceedings which would enable rhem to nleet the limitation that would other-wise come in rhe 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 couft confirms the decision raken by this High Court as also by the other High Courts in which the SLps are still pending, the Income Tax 9 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 ofthese 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 fresh proceedings.

12. The alarming trend of docket explosion in this Court' despite the clear precedent set tn Kanakola 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 withover600-T00petitionspilinguponthesameissue.This deliberate approach not only undermines the principle of judicial precedent but also strains the judicial resources unnecessarily' The Depaftment's strategy of awaiting the Supreme Court's decision on to initiate fresh Proceedings pending SLPs while continuing appears to be a calculated move limitation periods, rather than adhering to the established legal to buy time and circumvent 10 1 position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncements, parlicularly when this Court has already provided a balanced approach by preserving both the Revenue,s rights and assesses lnterests.

13. Another aspect which needs to be considerecl is that in lact it should have been realized by the Income Tax Dcpartment itself and should have found out.yia media in ensuring that proceedings under Sections 14g-A and 14g should not have been issued in a faceless manner, at least till the Hon,ble Suprerne Court decide the twelve hundred (1200) odd SLps which it is already seized of or., at least the Income Tax Department should have lbund out some remedial steps to ensure that wherever the authorities intcnd to initiate proceedings under Sections I4g-A and l4g, orher than in a faceless manner, the proceedings should have been deferrccl without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after the SLp,s ar.e 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 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 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 Courl resulting in filing of hdndreds 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 matter before the Hon'ble Supreme Couft having been taken on many occasions, the Hon'bte Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the lncome 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 satne issue; and to make things further worse, the Income Tax Departrrent is showing audacity by issuing notices continuously under Sections 148-A and r] \ 12 I48 through the jurisdictional Assessing officer whereas it oushr to have been only in the faceless manner

14. In the case of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXI r, on an issue whether ir r^,as justifiable on the part of the Income Tax Depaftment 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 held at paragraph No.25 as under, viz.. : "25. Mr. paridwalla has righ,y drawn out attention to the decision of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafi2 as also the recent decision of the co_ ordinate Bench of this Court in Samp Furniture (p) Ltd. v. lTOr3 of which one of us (Justice G.s. Kurkarni) was a member, wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not mean that ti 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 officiars of Revenue of treating decisions being ,,not acceptable,, was criticized by the Supreme Court. In such decision, following are the relevant observations made by the Supreme Court. ','rlr,,1o-r1.l.r.r^ort\mann.com422Bombay)l " | 1978 | I tj ITR 589 (Bombay) '' [2024) [65 taxmann.corn 5gl/300 Taxman 452 (Bornbay) lOe2l raxmann.com I6155 ELT 433 (SC) 6 13 ;", "6. Sri Reddv is peihaps risht in savins t::l^tt: *,""r" *"tt not actuated by any mala fides ln l"j:':; ,,,n", "".'rno'n""l,i'li';" "rr':::" genuinelY felt that the claim I tenable and that' if it was accepted' the Revenue But what sri Reddv overlooks is that we ;;; are not concerned here with the correctness or otherwise of their conclusion or of any factual but with the fact that the officers' in '"::i",: ;il intheirconclusion,by-passedtwoappellateorderstn 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 this conductof the Assistant collectors and the harassment to the assessee caused by the failure ";;,;; of these officers to give effect to the orders o{ authorities higher to them in the appellate hierarchy lt cannot be too vehemently emphasized that it ts^of utmost importance that' in disposing of the or".U*'t"i 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 the order of the Tribunal is binding upon the Assistant ColiectorsandtheAppellateCollectorswhofunction of the Tribunal The principles of under the iurisdiction iudicial 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 tlas been suspended by a competent court lf this healthy '14 rule is not followed, the result wiil only be undue harassment to assesses and chaos in administration of tax laws.

12. We h because .ave Additionar dealt with this aspect at some length, t^ nal ueen suggested by the rearned Solicitor General that the observations made by the High Court, have been harsh on the . ctear that.the observations of the Hish ::fi" l: gy vehement, and ,nprr"trbr. a tendencv ll'T l***' ","'on"i''nlnol:i:..::,.l revenue matters which, if allowed to become wic could result in considerable harassment ,lu"OruaA, the assesses-public without any benefit to the Reve we would like to say that the department ! ihould take these observations in the :;:il fl:,, ]T,,:::ffi :::iln#:i ::*i shoutd be paid by the adjudicating ,rti_itiu" ,no tn" appellate auft 'o'"'"t to the requirements of judicial discipline ,no or rhe hsher j::#:iffi#"1T:T:::"#H; on them.,,

15. What is worrying this Bench more is the fact that an endeavour is being made whole heartediy 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 thatlhe action of the Income Tax Department being vioialive of the r. 1 I I 15 FinanceAct,2o20andFinanceAct,202l.Now,inordertoprotect 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 of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Retldy (l supra) shall however be subject to theoutcomeoftheSLPswhichwerefrledbythelncomeTax Deparlment and which is pending consideration before the Hon'ble Supreme Court. I 6. 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 fortihed by the decisions of the various other High Courls on the very same issue; the pendency of this High Court would further be burdened which otherwise can be decided and disposed ofas a covered matter'

17. So far as the interest of the Revenue is concemed' we are of the considered opinion that the interest ofthe Revenue has already been considered and protected, as has been observed in paragraphs 76 fI Y-1 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 accordtngly 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 14g would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.

37. The preliminary objection 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 Ashrsh Agarwal, supra, as a one_time 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 conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the Court in the case of Ashish order of the SuPreme Agarwal, suPra.

18. We would only further like to make observations that since we arc inclined to dispose of the instant writ petition' conscious of the facr that the earlier order of this High court in the case of Kanakala Ravindra Reddy (l supra) is subjected to challenge befbre the Hon'ble Supreme Court in SLP No'3574 of 2024' pret-erred by the [ncome Tax Department' we make it clear that attowing of the instant writ petition is subject to outcome of the aforesaid SLP prefened by the Revenue against the decision of this Fligtr courl 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 Coult in the pending SLP on the very same issue'

19. Accordingty, the instant writ petition stands allowed in favouroftheassesseesofarastheissueofjurisdictionis concerned. As a consequence, the impugned notice under challenge under Sections 148-4 and 148 stands set aside/quashed' I I t 18 '1 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 Kankualo Ravindra Retlrty (l supra). There shall be no order as to costs Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY// SD/. M. OSMAN ALI BAIG ASSISTANT REGISTRAR N .l SECTION OFFICER Floor, Subhash Road, Siddipet,Telangana.

1. The lncome Tax Officgr, Ward '1 , Siddipet lncome Tax Office, 8-1-22, 1'l 2. The lncome Tax Officer, Ward 1, Sangareddy lncome Tax Office,Veerabhadra Nagar, New Bus Stand,Veerabhadra Nagar,Sanga Red d y,Tela nga n a. 3. The Principal Chief Commissioner of lncome Tax, Telangana and A.P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500028, Telangana. 4. The Chairman ,Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 110001.

5. The National Faceless Assessment Center, lncome Tax Department, New Delhi.

6. The Secretary, Union of lndia, Government, Department of Revenue, IVlinistry of Finance, New Delhi - 1 10001.

7. One CC to SRl. THANNERU CHAITANYA KUIVAR, Advocate [OPUC] B. One CC to MS. J. SUNITHA (JUNIOR SC FOR INCOIVE TAX) [OPUC] 9. One CC to SRl. GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF rND|A [OPUC] 10. Two CD Copies BM GJP \ To, € HIGH COURT DATED:01 1051202s ORDER WP.No.31435 of 2024 on litE S14 !) D 2 0 rlj8 zlE (. (- J- a ,9c 11g1rf:C ALLOWING THE WRIT PETITION WITHOUT COSTS \ a