The High Court · 2025

Petition under section '151 cPC praying that in the circunrstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the order Under section 147 r'w's 144 Dale of 06-03-2024' DIN ITBAJAST/S/14712023-24t1}621312g2(1) for the Assessment Year 2018-19 and Demand notice u/s 1 56 of determining the total income of Rs 4,1 1 '89,9521 thelncomeTaxactl96l,VideDlNandNoticeNo-ITBA/AST/Si15612023-2411 062 1313 57(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 Respondents: Ms' J' SUNITHA (JUNIOR SC FOR INCOME TAX) The Court made the following: ORDER THE HONOURABLE SRI JU AND THE HONOT]RABLE SRI JU NANDIKO TICE P.SAM KOSHY TICE NARSING RAO DA WRIT PETITION N .32175 of 2024 ORDER, (per Hon'ble Sri Jusrice P.Sum o.thy) Heard Mr. T.Chaitanya Ku , learned counsel for the petitioner and Ms.J.Sunitha, leamed unior Standing Counsel for the lncome Tax Department for th respondents. Perused the record

2. This is a writ petition where the proceedings are either challenged to the notices which wer issued under Section l48A and 148 of the Income Tax Act, 196 (tbr short 'the Act') or the assessment orders those have been sed under Section 147 of the Act which have been assailed

3. This writ petition is being take 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 j urisdictional Assessin Officer, whereas in terms of the amendment that was brought to he Income Tax Act by way of Finance Act, 2021 6r,^ !.;.^- w.e. f ., 0 I ^ /.1 ^-.^i 04 02 I onwards, proceedings , i._._,1+-_*-\rz* rFrFiF,i 2 under Section l4gA of the Act as also under. Section i4g of the Act ought to have also been issued and proceedecl in a facelc,ss manner IS

4. The contention of the petitioner tl'rat the issue of proceedings being in violation of the Finance Acr, 102 I i.e.. the impugned notices under Section l4gA and Section I4g of the Act not being issued in a faceless manrer, have already bcen dealt with and decided by this Court rn rhe case ol K.ANKANAI,A RAVINDRA REDDY vs. INCOME_TAX OFFI(],]Rr decidcd on l,4.09.2023 rvhereby a batch of writ petitions werc allowed and the proceedings initiated under Section l4gA as also Lrnder Section 148 of the Ad were held to be bad with consequential r.cliefs on the ground of it being in violation of the provisions of Section l5lA of thc Acr read with Notification lg/2022 dated 29.03.2021. The said judgment passed by this Court has also been subsequentll, followed rn a large number ol writ petitions which were allowed on sinrilar tenlls ' [(2023) I 56 raxrnann.corn I 78 (Tolangana)l I -

5. Down the line, we find that the same issue has also been decided against the Revenue b vaflous High Courts i.e., by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. AS STANT COMMISSIONER OF INCOME TAX & OTHERS2, auhati High Court in the case of RAM NARAYAN SAH vs. UN ON OF INDIAT, Punjab and Flaryana High Court in the case of ATINDER SINGH BANGU vs. UNION OF INDIA4, and Telan a High Court in the case of SRI VENKATARAMANA REDD PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME AXs where the issue was in respect of intemational taxation, Bo bay High Court in the case of ABHIN ANILKUMAR SHAH VS. INCOME, TAX OFFICER, INTERNATIONAL TAXATION6 hich is again on intemational taxation and central circle, High Co rt of Himachal Pradesh in the case of GOVIND SINGH vs. I COME TAX OFFICERT, Gujarat High Courl in the se of MANSUKHBHAI ' lzoz+1464 ITR 430 (Bom) '1Q024) 156 taxmann.com 478 (Gauhat 'l(2024) I65 taxmann.com 115 (Punjab '12024) 167 taxmann.com 4l I (Telanga " 12024) I66 taxmann.com 679 (Bombay '12024) 165 taxmann.com 113 (Himach lPradesh)l a)l )l l llaryana)l \"r - 4 OFFICER, DAHYABTIAI RADADIYA vs. INCOME .rAX WARD f1:;1S;t, Jharkand High Court in the casc ot.SHyAM SUNDAR SAW vs. UNION OF INDIAT, Rajasrhan High Court in the case o1'SHARDA DEVI CIIHAJER vs. TNCOME TAX OFFICER & ANOTHER and batch of writ petitionsr0 which stood decidcd on 19.03.2024. Sirnilar views have also been taken b.v' the Division Bench of Calcutta High Court in thc case of GIRDHAR GOPAL DALNIIA vs. UNION OF INI)IA & OIrs (M.A.T t690 of 2023),decided on25.09.2024. 6. Even tlrough the same issue having been decidcd by a larre number of Fligh Courts, we are still confronted with large nf ing "l identical matrers on daily basis ranging between -5 to I0 wrir petitions. That upon the instructions being soughr fr.om thc Department, rhey have been taking a solitary ground that thc decision of the Bombay High Court in ihe case ot Hexoware Technologies Ltut., (2 supra) as also the one which has been decided lry this Court in the case of Kanakaln Ravitttlro llgddy, *202+ SC('OnLirrc Cuj 40 l2 "2025 SC( Onl.irrc Jhar287 "'[ 202 3 : R.t-JD:4984-DB I :, - (l supra) has been subjected to ch llenge in a Special Leave Petition i.e., SLP No.3574 of 2024 efore the Hon'ble SuPreme Court and the Hon'ble SuPreme Co rt is seized ol the matter. ln addition, there are about 1200 SLP also filed arising out of the sarne issue being decided by various H gh Coutts

7. To a query being Put to the lear ed counsel for the Revenue, they have categorically accepted the act that there is no intertm order granted bY the Hon'ble SuPr me Court in anY of these lnatters pending before it' Meanw ile, fresh writ petitions of identicat nature are being piled up be re this Bench on dailY basrs and the pendency is getting increas on matter which otherwise has already been dealt and decided by is very High Court itself.

8. On the one hand, even though the order of this Court that r,r as passed as early as on 14.09.202 and more 16 months have tapsed, till date, we do not find anY remedial steps having been taken by the Income Tax DePartment to take approPriate steps to either hold back issuance of notice er Section l48A and under Section 148 of the Act bY the juris ictional Assessing Officer, rather the authorities concemed in th teeth of series of decisions by all the major High Courts in India are continuously still initiating proceedings under Section 14gA of the Act and also initiating proceedings under Section l4g ol the Act in contravention to the amendments brought into the Income fax Act pursuant to the Finance Act,2020 as also the Finance Act 2021.

9. 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 Ravindra Reddy (l supra), leamed Standing counsel for the Incorne 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 would 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 olthe petitioners in case if this writ petition is kept pending titt the finalization of the SLps pending before the Hon,bte ) 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 colne out with a mechanism to issue appropriate instructioag q" to take \'- I \l - I - appropriate steps in ensuring that pr ceedings under Section 148A of the Act as also the assessment o ers under Section 148 of the Act are kept in a hold in the light of the decisions dedcided by the vanous High Courts, it was submt ted by the leamed Standing Counsel that the said steps can only e taken at the level of CBDT as any such steps would have to be t en Pan India and cannot be limited to any of these jurisdictional gh Courls.

10. As a result of which, what we e facing is steep increase of litigation day in and day out even th ugh various orders have been passed by this High Court allowing it petitions on the very same issue. The Income Tax authorities c cerned are still even now tn 2025 also initiating proceedings in ntravention to the provisions of Section I5 lA of the Act and as a sult by now, more than 600 to 700 petitions have been already ot pited up before this Higlt Courl on an issue which otherwise ds squarely covered by the judgment of this Court in the case o Kanakala Ravindra Reddy ( I supra). What is also surprising the fact that though while allowing the writ petitions in the ase of Kanakala Ravindra Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected th interest of the petitioners r ..1 8 insofar as the liberty which rvas granted to the. Revenue for initiating fr.esh proceedings strictly in accordance rvith the amended provisions of the Act, as amended by the Financ e Act, 2020 anrl the Financc AcL,202r . Thc petitioner assessee woulcr be entitled to challenge or raise rhe other legal objections if the Revenuc initiates fresh proceedings. -l he Departr-nent has made no endeavour in availing the said liberty that was reserved for the Rcvenue. On the contrary, they have been still sticking on to the stand, which this High Court as well as rnanv other High Courts already held to be bad. I I. It appears that because ol the aforesaid liberty that this High Court had granted permitting the Revenue for initiating fresh proceedings as a one-time measure in a faceless rnanner, the Income Tax Departrnent wants to take advantage of the sarne by protracting these proceedings which would enable them to meet tlie limitation that would otherwise come in the way. Likewise, if the writ petition is kept pending For a considerable long pcriod of time and finally at a later stage if the Hon,ble Supreme Court confirms the decision taken by rhis Fligh Courr as also blz the other High Courts in rvhich the Sl_ps are still pending, the Incomc Ta.r / 9 -7 Departrnent would get the advantage f the liberly that is otherwrse protected in favour of the Reve ue for initiation of lresh proceedings lrom the disposal of the matters at a much later stage which ri,ould be advantageous and b neficial to the Revenue and would be equa[[y disadvantageous an detrimental so far as interest of the assesses arc concerned. As a c nsequence, the Income Tax Departnrent gets an extended period f time for initiation of lresh procecdings.

12. 'l'he alarming trend of docket ex losion in this Court, despite the clear precedent set in Kanakala R vindra Reddy (1 supra), is a matter ol grave concern. 'fhe Income Tax Department's persistent - - initiation of lresh proccedings, disreg .,;.,'--1-.?F+.T-- lng the estabtlsneo Juolclal pronouncements, has led to an unp dented surge in litigation with ovcr 600-700 pctitions piling p on the same issue. This deliberate approach not only undermi es the principle of judicial prccedent but also strains the judiciat sources unnecessarily. The Department's strategy of awaiting the upreme Courl's decision on pending SLPs while continuing to initiate fresh proceedings appears to be a calculated move to buy time and circumvent limitation periods, rather than adher g to the established legal (.-- - 1 - 10 posltlon. SLrch conduct raises serious questions about the administrative efficiencl, and tlre respect for j udicial pronouncelnents, particularly rvhen this Court has already provided a balanced approach by preserving both the Revenue,s r.ights and assesses inlerests

13. Another aspect which needs to be considered is that in fact it should havc been realized by the lncome Tax Departrnent itself and should have found out via rnedia in ensuring that proceedings under Sections I4g_A and t4g should not have bcen issued in a faceless manner, at least till thc Hon,bte Supreme (.ourt decide the twelve huncired (1200) odd SI-ps r.rhich ir is arready seized of or., at least the Incorne Tax Department shourd have fbund out some remedial steps to ensure that wherever the arrthorities intend to initiate proceedings under Sections l4g-A and I4g, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter fumher intimating thc assessee that they shall initiate appropriatc proceedings only after the SLp,s are decided by the Hon,ble Suprerne Court on the verv sarne issue. This again, the Incorne Tax Deparlruent. has nor been able to give a convincing repiy, except for the lact that such a decision if at all 11 has to be taken, has to be taken for e whole of India, and which otherwise has to be by way of a poli y decision and that too at the level of Central Board of Direct ixes. Though the leamed Standing Counsel fbr the [ncome T Department contended that the Dethi High Court dismissed a wri petition of similar nature, on the onc hand when the l{igh Cou is struggling to reduce rts pendency, slrch notices which are der challenge in this writ petition are lorcing the assessee to ock the doors of this High Courl resulting in fitirrg ol hundreds f new writ petitions which in the long run not only aff'ccts the dis sal of the writ petitions but also consurnes substantial tirne of he Bench in hearing these matters again and again on daily basi Admittedly, in spite of the rnatter before the Hon'ble Supreme ourt having been taken on many occasions, the Hon'ble Suprem Court which is seized of the matter has been reluctant in granting y interim protection to the Income Tax Department. Yet, the uthorities concemed at the State level are not ready to accept the erdict passed by a majority of High Courts of different States on e same issue; and to make things further wolse, the Income x Department IS showing audacity by issuing noticcs continuous y under Sections 148-A and *.-!sig=EErr, 72 I48 through the -jurisdictional Assessing Officer uhereas it ought to have been only in the face,less manner. \--- 1 -

14. In the case ol BANK OF INDIA vs. ASSISTANT COMMISSIONER, TNCOME TAXr,, on an issue whethcr ir was justifiable on the part of the Incorne Depanrr.rent in not following an order passed b;, the adjudicating ar.rthority only on the ground that the appeals are pending, thc Division llench of the High Court of Bombay held at paragraph No.25 as un<ler, viz., : .l.ax "25. [t4r. paridwalla has righ y drawn out attentron to the decision of this Court in Commissioner of Income Tax vs. Smt. Godavaridevi Sarafr2 as also the recent decision of the co_ ordinate Bench of this Coud in Samp Furniture (p) Ltd. v. ITOrJ 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 Ioose its binding force. Referring to the decision of the Supreme Court rn Union of lndia vs. Kamlakshi Finance Corporation Ltd.r4, 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 decisjon, followjng are the relevant observations made by the Supreme Court. ll ttl0_tt, I70 raxmilnn.corn 42J rBorrrbay)l '' It978] I l3 llR 589 (Bornbar) " 1202+1 165 laxmann.corn 5g1,r300 Taxman.l52 (Bornbar,) 'o ltTgZl taxmann.com 16,/55 Irl_T 43 j (SC) 13 in saying that the is perhaps right "6. Sri ReddY any mala fides in not actuated bY officers were . They PerhaPs impugned orde passing the e assessee was not genuinely felt that the claim of epted, the Revenue tenable and that, if it was a overlooks is that we would suffer. But what Sri Redd the correctness or are not concerned here with or of any factual otherwise of their conclusion malafides but with the fact that t e officers, in reaching o appellate orders in in their conclusion, by-Passed were Placed before regard to the same issue whic als) and the other of them, one of the Collector (AP s, in our view' rightlY the Tribunal The High Court h sistant Collectors and criticized this conduct of the A caused bY the failure the harassment to the assesse ct to the orders of of these officers to give eff appellate hierarchy' lt authoritres higher to them in the phasized that it is of cannot be too vehemently e disPosing of the utmost imPortance that' I , revenue officers are quasijudicial issues before the appellate authorities' bound bY the decisions of th ctor is binding on the The order of the Appellte Coll hin his jurisdiction and Assistant Collectors working w ing uPon the Assistant the order of the Tribunal is bin ollectors who functlon Collectors and the Appellate unal. The PrinciPles of uMer the jurisdiction of the Tri e orders of the higher judicial disciPline require that followed unreservedlY appellate authorities should The mere fact that the by the subordinate authorities y is not "accePtable" to order of the appellate authori ob1ectionable Phrase - the department - in itself an appeal can furnish no and ls the subject matter of a less its operation has ground for not following it nt court. lf this healthy been susPended bY a compe ...t1 74 rule is not followed, the result will only be undue harassment to assesses and chaos in adminrstration 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 observatrons made by the High Court, have been harsh on the offlcers. lt is clear that the observations of the Hrgh Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in constderable 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 lhe requirements of iudrcial 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 thc l-act that an endeavour is being made whole heaftedly to ensurc not to generate further litigation on issues u,hich have been laid to rest by a lar.ge number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violativc of the 15 Finance Act,2020 and Finance Act, 202 I . Now, in order to protect the interest of the Revenue as also at of the assessee, it would be trite at this juncture, if we dispos ol thc writ petition with an observation/direction that the dispos I of the instant writ petition in terms of the judgment rendered by his High Court in the case of Kankanala Ravindra Reddy (l supr ) 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 circum tances, this Bench is of the considered opinion that unless and u til we do no1 timely dispose of matters which are squarely coverc by the decision of this Court and which stands fortifled by the d cisions of the various other High Courts on the very same issu , the pendency of this High Court would further be burdened wh ch otherwise can be decided ar-rd disposed of as a covered rnatter. 17 . So far as the interest of the Re nue is concemed, we are of the considered opinion that the intere of the Revenue has already been considered and protected, as has een observed in paragraphs L6 36,37 and 3tl 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 sustarnable. The notices so issued and the procedure adopted betng 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 i4g 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 prelimtnary objection raised by the petrtioner is sustained and all thbse writ petitions stands allowed on this very .turisdictional issue. Since the impugned notices and orders are getting 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 conlended in an appropriate proceedin gs. 38 of Ashish exercising Since the Hon'ble Supreme Court had, in the case measure of the Aganval, supra, as a one{ime the powers under Article 142 under the substituted provlsions. and this Court d owrng the petitjons only on the procedural flaw, 4h€-{jght t7 conferred on the Revenue proceed further if they so order of the Supreme Co Agarwal, supra. uld remain reserved to ant from the stage of the rt in the case of Ashish

18. We would only further [ike o make observations that since we are inclined to dispose of the in tant writ petition, conscious of the fact that the earlier order of is High Court in the case of Kanakala Ravindra Reddy (l SU ra) is subjected to challenge before the Hon'ble Supreme Co rt in SLP No.3574 ol 2024, preferred by the Income Tax Dep ent, we make it clear that is subject'to outcome oflh aforesaid SLP preferred by the Rev nue against the decision of this High Courl in the case of Kanak lu Ravindra Reddy (l supra). This, in other words, would mean t at either of the parties, if they so want, may move an appropnate petition seeking revival of this writ petition in the light of the de ision of the Hon'ble Supreme Court in the pending SLP on the ve same lssue

19. Accordingly, the instant w it petition stands allowed in favour of the assessee so far a the issue of jurisdiction IS concemed. As a consequence, the impugned notice under challenge under Sections 148-A an 148 stands set aside/quashed. 18 F!'dl l The consequential orders, if any, also stand set asicle/quashed in similar terms as have been passed by this High Court in the case of Ksnkanala Ravindra Reddy (l supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending. if any, shall stand closed. To, //TRUE COPY// t-P SIS . PONNA KRISHNA TANT REGISTRAR SECTION OFFICER

2. ih; Principal "Chief Commissioner of lncome Tax, Telangana alq

1. The lncome Tax Offlcer Ward 1, Sangartddy lncome Tax Office' '' Veerabhadra Nagar, New Bus Stand, Veerabhadra Nagar, Sangareddy 502001 , Telangana. Hyderabad, lT Towers, AC Guards, lvlasab Tank, Hyderabad 500028, ^.i, Telanoana. 3. The dhairman, Central Board of Direct Taxes, Department of Revenue, tvlinistry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 110 001. 4. The National Faceless Assessment Center, lncome Tax Department, New 5. The Union of lndia, Represented by its Secretary to the Government' Deoartment o[ Revenue, Ministrv of Finbnce, New Delhi - 110 001 . 6. On'e CC to SRl. THANNERU CIIAITANYA KUMAR , Advocate [oPUC] 7. One CC to lr.4s. J. SUNITHA (JUNIOR SC FOR INCOME TAX) IOPUCI 8. Two CD Copies Delhi. ^ BM TJ Y," HIGH COURT DATED:01 10512025 ORDER WP.No.32175 of 2024 ;{ 1 '15 -c r! Ie- ( -.) 12 AUE M /.:;-' {:' ii,j I' t o ALLOWING THE WRIT PETITTON WITHOUT COSTS rO .o\!r''\ ft-rdar