PRIMARY AGRICULTURAL COOPERATIVE CREDIT SOCIETY LIIVIITED MADUR v. l.ThelncomeTaxOfficerWardl

Petition under Article 226 of the 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 Mandamus, declaring the order passed by the income tax authorities Nationar Faceress E-Assessment centre completed the assessment U/S 147 r.w.s 144 read with section 1448 Date of 06/03/2024,D|N ITBA/AST/S/147r2023-24t1062078656(1) for the Assessment year 2018-19 determining the totat income of Rs. 50,26,931/_ as arbitrary, illegal, bad in law, without jurisdiction. void-ab-initio, viorative of t'ire principres of naturar justice apart from being viorative of Articres 1a, 19(1xg) and 265 of the constitution of rndia and Sec_ 14BA of the lncome Tax Act, 1g61, and consequen,y set aside the same in the interests of justice. |.A.NO:1 OF 2024 Petition Under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be preased to suspend the order under section 147 r.w.s 144 read with section .1448 Date of OGlO3l2O24, Dt N tTBA/AST t S I 1 47 t2O23_Z4t 10620T 8656(1 ) for the Assessmenr Year 2019-1g determining the totar income of Rs. 50,26,g 31t- and Demand notice u/s 156 of the tncome Tax act 1961 , vide DIN and Notice No. ITBA/AST rsr15612023-2411062078905(1) Dt. 06/03/2024 for the assessment year 2018-19 pending disposal of the above writ petition. Counsel for the petitioner : SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1 & 2 : Ms. J.SUNITHA (JUNIOR SC FOR rNcoME TAX) 9gy59]l-* the Responcient No.3 : SRt GAD| PRAVEEN KUMAR, DEpUTy SOLICITOR GENERAL OF INDIA Counsel for the Respondent Nos.4 to 5 : SRt P.SHASHIDHAR REDDY The Court made the following ORDER THE TIONOURABLE SRT JUSTICE P.SAM KOSHY AND THE HONOURABLE SRIJUSTICE NARSING RAO NANDIKONDA WRIT PETITION No.32 l9O of 2024 ORDER: (per Hon'ble Sri Justice P'Sam Koshy) Heard Mr. T.Chaitanya Kumar' leamed counsel for the petitioner and Ms.J.Sunitha, leamed Junior Standing Counse[ for the lncome Tax Department for the respondents' Perused the record

2. This is a writ petition where the proceedings are either challenged to the notices which were issued utrder Section 148A and l48 of the Income Tax Act, lg6l (for short 'the Act') o| the assessment orders those have been passed under Section 147 of the Act which have been assailed' This writ petition is being taken up today only on one ol the i. grounds, that the notices issued under Section 1484 of the Act and the subsequent initiation ofproceedings under Section [48 of the Act by the jurisdictional Assessing Officer' rvhereas in tenns ol tlre amendment that was brought to the Incorne Tax Act by r,vay of Finance Act, 2021 w'e'f', 01'04'2021 onwards' proceedings 2 under Section l4gA of the Act as also under Section l4g oi 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 vioration of the Financ e Act, 202r i.e., the impugned notices under Section r4gA and Secticn t4g of the Act not being issued in a faceless anner, have aheady been dealt with and decided by rhis Court in the case of KAI.IKANALA RAVINDRA REDDY vs. INCOI,,IE_TAX OFFICERT decided on l4-09.2023 whereby a batch of writ petitions were allowed and the proceedi'gs initiated under Section r4gA as arso under Section 148 of the Acr rvere held to be bad with consequential reliefs on thc ground ol- it being in vioration of the provisions of Section l5lA ot. the Act read u,ith Notification lg/2022 dated,29.03.2022. The said judgrnent passed by this court has also been subsequently follorr,.ed in a large nurntrer ol writ petitions which were allowed on similar. tenns. ' [(2023 ) I 56 raxnrann.corn I 7g (Telangana)] 3

5. Down the line, we find that the same issue has also been decided against the Revenue by various High Courts i'e" by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., VS. ASSISTANT COMMISSIONER oF INCOME TAx & OTIIERS2, Gauhati High Court in the case ol RAM NARAYAN SAII vs' UNION OF INDIAs' Punjab and f'laryana High Court in the qase of JATINDER SINGH BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of intemational taxation, Bombay High Court in the case of ;\BHIN ANTLKUMAR SHAII vs' INCOME TAX OFFICER' INTERNATIONAL TAXATIOIf which is again on intemational taxatiotl and central circte, High Court of Himachal Pradesh in the case of GOVIND SINGII vs' INCOME TAX OFFICERT' Gujarat High Court in the case of MANSUKHBHAI ' 1z0u+1 464 ITR 430 (Bom) 'l(2024) [ 56 taxmann.com 478 (Gauhati)] " t(2024) 165 taxmann.com 115 (Punjab & Haryana)l '[2024) [67 taxmann.com 411 (Telangana)] '12024) 166 taxmann.com 679 (Bombay)l- ' 1ZO:+') I65 taxnrann.com 113 (tlimachal Pradesh)l 4 DAHYABHAI RADADTYA vs. INCOME TAx OFFICER, WARD 3(3)(18, 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 f{igh Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 of 2023), decided on 25.09.2024.

6. Even thougl.r the sarne issue having been decided by a large number of High Coufls, rve are still confronted with large filing of identical matters on daily basis ranging between 5 to I 0 writ petrtions. That rrpon the instructions being sought from the thcy have been taking a solitary ground that the decision of thc Bonrbay tligh court in the case of Hexaware Technologies Lt(t., (2 supra) as atso the one which has been decided by this Court in rtre case of Kanakalo Ravindra Recldy Department, 82024 SCC C)nLine Gu.i .10 t 2 '2025 SCC OnI.ine .thar 2g7 72023, RI-J D :4984 - DI) l I o 5 (L 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'

1. 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 identicat nature are being pited up before this Bench on daity basis and the pendency is getting increased on matter which otherwise lias alrcady been dealt and decided by this very High Court itsett"

8. On the one hand' even though the order of this Court that u,as passed as early as on 14'09'2023 and more 16 months have lapsed, tilt clate, we do not find any remedial steps having been taken by the lncome Tax Department to take appropriate steps to either hotd back issuance of notice under Section 148A and under Section 148 ol the Act by the jurisdictional Assessing Officer' rather the authorities concemed in the teeth of series of decisions 6 by all the ma;or High Courts in India are continuously still initiating proceedings under Secrion I48A of rhe 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 put as [o why can,t this writ petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanokala Rn,indra Rettdy (l supra), leamed Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the incomc Tax Department where they would be required to tirc cclLrar nur,ber of sLps before the Hon'ble Supreme Court and it u,or-rld be further burdening the exchequer of the Union of India. [t was also the contention of the learned Standing Counsel that no prejudice would be caused to the interest of the petitioners in casc ii.rhis writ petition is kept pending till the finalization ol. the SLps pending before the Hon,ble Supreme Courl and the fact that the peritioner is already enjoying the benefit of interirn protection. Nonetheless, on the earlier query of this court as to why the Income Tax Departrnent have not come out with a ntechanisrn to issue appropriatc instructions or to take 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 hotd in the light of the decisions dedcided by the various High Courrs, it was submitted by the leamed Standing Counsel that the said steps can only be taken at the level of CBDT as any such steps would have to be taken Pan India and cannot be limited to any of these jurisdictional High Courts' 10. As a result of which' what we are facing is steep increase of litigation day in and day out even though various orders have been passed by this I{igh Court allowing writ petitions on the very same -I'ax authorities concemed are still even now in issue. The lncolne 2025 also initiatrng proceedings in contravention to the provisions of Section l5lA olthe Act and as a resultby now' more than 600 ro 700 pctitions have been already got piled up before this High Cou( on an issuc rvhich otherwise stands squarely covered by the judgment of thl5 Ciourt in the case of Kanukala Ravindra Reddy (l supra). What is also surprising is the fact that though while allorving the writ petitions in the case of Kanakala Rsvindra Rerttll' ll supra)' the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners 8 insofar as the liberty which was granted to the Revenue lor initiating fresh proceedings strictry in accordance with the amended provisions of the Act, as amended by the Financ e Act, 2020 arul, the Finance Act, 2021. The petitioner assessee rvould be entitled to challenge or raise the other legar objections if the Revenue initiates fresh proceedings. The Department has made no endeavour in availing the said liberty that was reserved for the ltevenue. On the contrary, they have been still sticking on to [he stand, which this High Court as well as many other i{igh Courts already held to be bad.

11. It appears that because of rhe afbr.csaid Iiberty rhat this High Court had granted permrttrng rhe Revenue lbr initiating fresh Proceedings as a one_time measurc rn a faceless manner, the Income Tax Department wants to take aclvantage of the same by protracting these proceedings which wourd enable rhern to meet the limitation that would orherwise come in rhe rvay. Likewise, if the writ petition is kept pending fbr a consider.able long period of time and finally at a later stage if the Hon,ble Suprerne Court confirms the decision taken by this High Court as also by the other High C -"-ts in which the SLps are still pcnding, the Incorne Tax 9 Department would get the advantage o f the liberty that is otherwrse protected in favour of the Revenue for initiation of fresh proceedings from the disposat of these matters at a much later stage which would be advantageous and beneficial to the Revenue and ' would be equally disadvantageous and detrimental so far as interest of the assesses are concemed' As a consequence' the Income Tax Depaftment 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 setin Kunakala Ravindra Reddy (l supra)' is a matter of grave concern The lncome Tax Department's persistent initiation of fresh proceedings, disregarding the established judicial pronouncements, has led to an unprecedented surge in titigation with over 600_700 petitions piring up on the same issue' This deliberate approach not only undermines the principle of judicial precedent but also strains the judicial resources unnecessarily' The Depaftment's strate gy of arvaiting the Supreme Court's decision on pending SLPs while continuing to initiate fresh proceedings appears to be a calculated tnove to buy time and circumvent limitation periods, rather than adhering to the established legal 10 position. Such conduct raises serious questions about the administrative efficiency and the respect fbr judicial pronouncements, particularly when this Court has already pr.ovided a balanced approach by preserving both the Re,renue,s rights and assesses interests. 13' Another aspect which needs to be considered is that i. fact it should have been realized by the Incorne Tax Deparrment itself and should have found out via media in ensuring that pr.oceedings under Sections 14g_A and I4g should not have been issued in a faceless manner, at least till the Hon,ble Suprcrne .ourt decide the trvelve hundred(1200) odd slps which it is arreadl.scized of or, ar least the Income Tax Department should havc tbund out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections l4g_A and I,lg, othcr tha, in a faceless manner, the proceedings should ha,".e been deferred without precipitating the matter further intimati.g rrre assessee that they shall initiate appropriate proceedings only aftcr rhe SLp,s ar.e decided by the Hon,ble Supreme Couft on the verv sar.ne issue. This again, the Income Tax Department, has not been ablc to give a convinsing reply' except for the fact that such a dccision it.ar arl L-t has to be taken, has to be taken for the whole of lndia' and which otherwise has to be by way of a poticy decision and that too at the level of Central Board of Direct Taxes' Though the leamed Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of similar nature' on the one hand when the High Court is struggling to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this High Court resulting in filing of hundreds ol new writ petitions which in the long run not only affects the disposal of the writ petitions but Bench in hearing these also consumes substantial time of the matters again and again on daily basis' matter before the Hon'ble Suprerne Court having been taken on many occasions, the Hon'ble Supreme Court which is seized of the matter has been reructant in granting any interim protection to the Income Tax Department' Yet' the authorities concemed at the State level are not ready to accept rhe verdict passed by a majority of High Courts of dift'erent States ot't the same issue; and to make 'fax Department is showing things further worse, the Income audacity by issuing notices continuously under Sections 148-A and AdmittedlY, in sPite of the 12 148 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 COMMISSIONER, INCOME TAXU, on an issue wherher ir was justifiable on the part of the Income Tax Department in not following an order passed by the adjudicating authority only on rhe glound thar the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz.. : "25 Mr. paridwara has righry 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 C orwhich one or us,r,",,""J[ ! ?il1.ffi::J:i:::11 _^i1]" the Court categorically observed that the Revenue havtng not "accepted,, the judgment of the High Court would not mean that tr the same is set aside in : b nd ns force *",".n.n 1J;:T:illJ""i,ii-;l;::: :ffi : Union of lndia vs. Kamlakshi Finance Co.por"tion Ltd.,. 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, fo cwing are the relevant observations made by the Supreme Court. " ft:o: j) [ 7o raxmann.con r?s r I l:",i,i'rri'iil,l ffr@onbattl l, il ;; I:::11 '' I le92 | raxrnann.corn I6155 ELT 433 (SC) r65 raxmann.com :8_1/300 raxman 452 (Bombay ) 13 "6. Sri Reddy is perhaps right in 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 correctness or otherwise of their conclusion or of any factual malafides but with the fact that the officers' in reaching in their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has' in our view' rightly criticized this conduct 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 appetlate hierarchy- lt cannot be too vehemently emphasized that it is of utmost importance that' in disposing of the quasijudicial 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 withrn 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 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 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 t+ rule is not followed, the result will only be undue harassment to assesses and chaos in administration of lax laws apparenfly

12. We have dealt with thir because it has been .r;I;:";;1",::::I Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. lt is clear that the observation s of the High Court, seemingly vehement, and unpalatable to the Revenue, are only inten ded to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses_public without any benefit to the Revenue. We would like to say that the department should tat<e these observations in the proper spjrit. The observations of the High Court should be kept tn mind in future and the utmost regard should be paid by the adjudicating authorities and the appeltate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the hrgher appellate authorities which are binding on them."

15. What is rvorying this Bench more is the fact that arr endeavour is being made whole heartedly to ensure not to geucratc further titigation on issues which have been laid to rest b1,a lar_e,t-. number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative ol.thc 15 Finance Hct,ZOZland 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 observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankattala Ravindra Rettdy (l supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Deparltnent and which is pending consideration belore the Hon'ble Suprcme Court'

16. ln the given facts and circumstances' this Bench is of the considered opinion that unless and until we do not timely dispose ot'matters which are squarely covered by the decision of this Coutt and which stands fortified by the decisions of the various other t{igh Courts on the very same issue' the pendenc"'- ol this High Cor.rrt would further be burdened which otherwise can be decided and disposed of as a covered matter' 11 . So far as the interest of the Revenue is concerned' rve are of the considered opinion that the interest of the Revenue has already been considered and protected' as has been observed in paragraphs

1.6 36,37 and 38 ofthe order which, for ready reference, is reproduced hereunder: 'othe

36. For all the aforesaid r( issued and *re proceeoinia:TjTJTJT:il:fi: Department is neither t"n'o'"' nor sustainable. The notices so issued rno Procedure adopted being per se illega,, deserves be and are accordingry set aside/quashed. As a cons all the impugned orders getting quashed, ,n" ,"0'"n""' by rhe respond"n.o"o"n*lllffi:T';T: ffi::: issued under Section 141 quashed and * is ",0",."0 ";::]fi;H: ,:j::" 1: are quashing the consequential order is on the principles that when the rnitiation of the proceeding, it""ff ;r, procedurally wrong, the sut rsequent orders also gets nulified automaticafly. 37 The preli sustained and this very jurisd mrnary objection raised by the petitioner is all these writ petitions stands allowed on ictional issue. Since the impugned notices orders are gefting quashed on the point of diction, we are not inclined to proceed further and de the other issues raised by the petitioner which ds 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_time measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituled provisk 'nt' and this court allowing the petitions onry on ,n" procedural flaw, the right 77 conferred on the Revenue would rernain reserved to proceed further if they so want from the stage of'the order of the Supreme Court in the case of Ashish Agarwal, supra.

18.Wervouldonlyfurtherliketomakeobservationsthatsincc r.r,e arc inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kannkalo Ravintlra Reddy (l suPra) is subjected to chal[enge belore tlre Hon'ble Supreme Court in SLP No'3574 of 2024' prct-en'gd by the lncome Tax Department, we make it clear that allorving ol the instant writ petition is subject to outcome of tl.re atirresaicl SI-t) pre fered by the Revenue against the decision of this l{iglr ('oLrrt in ihe case of Kanakala Ravindra Redd;' (l strpra). t hi:. irr other words, would mean that either of the parties' if tlicl s() \\ arrt. nrav tnove an appropriate petition seeking revival ol this rr r.it petirion in ttre tight of the decision of the IIon'ble Suprcrrtc (lourt irr the pending SLP on the rrery sanrc issue'

19. Accordingly, the instant writ petition stands allorvcd lavor.rr ol' the assessee so far as the issue of jurisdiction 1n IS concclned. As a consequence, the impugned noticc utrdcl challcnge rrndcr Scctions 148-A and 148 stands set aside/quashed ! t I 18 The consequential orders, il any, also stand set .aside/quashed in similar terms as lrave been passed by this High Court in the case of Kankanala Ravindru Reddy (l supra). There shall be no order as to costs. Consequently, misce[[aneous petitions pending, if any, shall stand closed. //TRUE COPYII SD/- AHMED ABDULLAH KHAN ASSISTANT REGTSTRAR ,r"#* OFFICER iJfl?At# p rincipa r c h ie f co m rn r s's -r"rlir

1. The lncome Tax Officer.Ward 1. Siddipet lncome Tax Office, 8_1_22, 1St ^ Iloot, Subhash Road, Srddipet SOZrO5,-ierJiqa"na. 2' !.he. "t.ri"' i3,'r"r"nsuna and A. p. Ir rowers ec cuaros nia.,ii'i""r'HvoE;";#:#6ii, 3. The Chairman. Central Board of Drrect Taxes, Department of Revenue. Ministry or Finance Governmenr or rndia, suir"tiriii'iir-iiiii"il) riE*EL*,i 4' ThenNationar Faceress Assessmen{ c""t.rl"t"",ne Tax Department, New 5. The Secretary to the Governmeni. Unron of India, Department of Revenue, ^ Ministry of Finance. New Dethi f f O OOf 6. One CC to SRt THANNERU.Cgrrer.rVn KUMAR, Advocate tOpUCl 7. one cc to Ms J SUNTTHA trnrvion sc i'o"Fi'iila6ilE"iaxrXirIIit" 8. One CC to SRt GAD| PRA.VEEN KUIVAR, DEpUry SOLIC|TOR GENERAL ^ OF lNDlA, Advocate (OPUC) 9, One CC to SRt p SHASHIDHAR REDDY, Advocate (OPUC) 10.Two CD Copies loPUCl To SA GJP "Z-=--:-:\-- ..t-..1_.p.1 :.iE S r)- /a ,:' Ln i I 2s il6 206 , -)' ) 2, Ar ,!D. r -. -1.' HIGH COURT DATED:01 1051202s ORDER WP.No.32190 of ZO24 ALLOWING THE W.P WITHOUT COSTS. // /.4 /zf 4 /