High Court · 2025

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 lssue an appropriate writ, order or dlrection more particularly one in the nature of writ of fvlandamus, declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre) completed the assessrnent U/S147r'w.sl44readwithSectionl44Bofthelncome-taxActDateofl5-02- 2024'DINITBA/AST/S/14712023'2411061005975(1)fortheAssessmentYear z'55'3e'100i as arbitrarv, illesal, bad 2015-16 determining the totat income of Rs. 2,55,39 in law, without j,rrisoiction ;;::^",::,:" iustce apart r,o,, o"njnu;"j:;:t l;':^;::T ":J::,Ji:T"x, Constitution of lndia and Sec. 14BA of the lr consequenry set aside the same in the interests.rrrirl" IA NO 10F 2024 ::T: Tax Act, i961, and petition under Ser the arridavit ,,*o ,,. .,,'i"",i ::ln]r}:lt:^lltin the circumstances stated in court may be preased to suspend the order Undr ,"",,on 147r.w.s ,oo l,nn rncome_tax Act Date o, ,u, s - o 2 _2o2 4,o, *,.rro.# : "ii:, ;:it: i r; #.Tjrl; ro r th e Assess me nt yea r 2015-16 determining the total income of Rs.2,55,39,100/- and Demand notice u/s .BA/AS r/s/1 s 6 20 23., ;;H:H ;.; [,iH:; ;: ; :H ru: :X;:: 2015-16 pending disposal of the above Writ petition. Counsel for the petitioner: counser for rhe Respondent Nos.1 SRI THANNERU CHAITANYA KUMAR r,,yj*i;Rr#r#* " ,""o*. ,*, counser for the Respondent No.s: The Court made the following: ORDER i,Tl?rlfStr[?i*BiiREpRESENTTNG .[t{E IIONOURABI,E SRI JUSTICE' P'SAM KOSHY ANI) TTIE HONOURABLE SRI JUSTICE NARSING RAO NANDTKONDA WRIT PETITI ON No. 33424 oF 2024 ORDER, (per Hon'ble Sri Justice P Sam Koshv) l{eard Mr'Thanneru Chaitanya Kumar' iearned counsel lor the petitioner, Ms'J'sunitha' learned Junior Standing Counsel for the Income Tax Department for rr: spondent Nos' 1 to 4 and Mr. B. Mukherjee, Ieamed counsel representing the Union of India tbr respondent No'5' Perused the record'

2. This is a writ petition where the proceedings are either chaltenged to the notices which were issued under Section l48A and 148 of the Income Tax Act' 1961 (for short 'the Act') or the assessment orders those have been passed under Sectioh l4'7 of the Act which have been assailed'

3. This writ petition is being taken up today only on one of the 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 Income Tax Act by way \ 2 r of Finance Act, 202t w.e.f_, 01.04.2021 onwards, proceedings under- Seclion l4gA of the Act as also under Section l4li of thc Act ought to have also heen issued and proceeded in a f_aceless manner

4. The contention of the petitioner rs that the issue of proceedings being in violation of the Financ e Act, 2021i.e.. the lmpugned notices under Section 148A and Section 148 of rhe Act not berng rssued in a faceless manner, have already been dcalt with and decided by this Courr in the case of KANKANALA RAVINDRA REDDY vs. INCOME_TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section l4gA as also un<Ier Section I48 of the Act ,were held to be bad with consequential l"ti"f, on th. ground of it being in vioration of the provisions of Section I5rA of the Acr read wirh Norification lg/2022 dated 29.03.2022. l.he said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allowed on similar terms. ' [(2023) 1 56 taxmiinn.com Lu^,,k,,u,.uom 178 (Tetangana)l / 3

5. Down the line' we hnd that the same issue has also been decided against the Revenue by various High Courts i'e" by the Bombay l{igh Court in the case ol IIEXAWARE 'TECIINOLOGIES LTD', vs' ASSISTANT COMMISSTONER .tAx & OTHERS2, Gauhati l{igh Court in the case oF INCOME of RAM NARAYAN SAH vs' UNION Ot'- INDIAT' Punjab and ltaryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIC, and Telangana High Court in the case of SRI VENKA'IARAMANA REDDY PATLOOI,A VS. DEPUTY COMMISSIONER OF' INCOME TAX5 wherc thc issue was in respect of international taxation' Bombay Fligh Court in the case of ABIIIN ANILKUMAR SHAH VS. INCOME TAX OFFICER, INTERNATIONAL TAXATION6 which is again onlintcrnational taxation an<l central circle, High Court of Himachal Pradesh in the case of GOvtND SINGH vs' TNCOME TAX OFFICERT, Gujarat High Court in the case of MANSUKHBHAI 'yzoz+1464 ITR 430 (Bom) 'l(2024) 156 taxmann-com 478 (Gauhati)l " tQO24) 165 taxmann.com 1 15 (Punjab & Haryana)l ' 12024) 167 taxmann.com 4 t I (Telangana)l " 12024) 166 taxmann.com 679 (Bombay)l ' izOzq I 65 taxrnann-corn I l3 (Himachal Pradesh)l I I 4 DAHYABI{AT RADADIYA vs. TNCOME TAx OFFICER, WAR_D 3(3X5)s, Jharkand High Court in rhe case of SHyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan l{igh Courr in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and barch of writ petirionsr0 which stood decided on 19 03.2024. Similar views have also been hken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF_ INDIA & ORS (M.A.T t690 ctf 2023), decided on 25.09.2024. 6. Even thc,ugh 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 I0 writ petitions. Thar upon the instrucrions being ,orgllt. fiom the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case ot Hexaware Technologies Ld., (2 supra) as also the one which has been decided by this (lourr in the case of Kanakala Ravitttlra Reddy 8202+ scc onlint: Guj 4012 '2025 SCC Onlinr: Jhar 287 'o12ozJ : RJ-JD:a984-DBl .// 5 (i supra) has been sub.lected to challenge in a Special Leave Petition i'e', SLP No'3574 ol 2024 before the Hon'ble Supremc court and the Hon,bre Supreme court is seized of the matter' In addition, there are about 1200 SI-Ps also hled arising out of the same issue being decided by various High Courts' 7. To a query being put to the learned counsel for the Revenue' they have categorically accepted the fact that there is no intcrim order granted by the Hon'ble Supreme Court in any of thesc matters pending betbre it Meanwhile' fresh writ petitions of identicat nahlre are being piled up before this Bench on daity basis and the pendency is getting increased on matter which otherwise hasalreadybeendealtanddecidedbythisveryHighCourtitself.

8. On the one hand, cven though the order of this Court tltat was passed as early as on t4'09'2023 and more 16 months havc Iapsed, 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 148,4. and under Section 148 of the Act by the jurisdictional Assessing Officer' rather the authorities concerned in the teeth of series of decisions \ I 6 F Act contrnuously still l48A of the Act and also by all the maJor High Courts ln lndia are rnrtrating proceedings under Section rn rtrating Proceedings under Sec:tion I48 ol rhe Act contravention to the amendments brought into the Income lax pursuant to the Finance Act,2020as also the Finance Act 2021. 9. Upon a. query being put as to why can,t this writ petition disposed of in the teeth of the decision rendered by this Court the case of Kanakala Ravindra Reddy (lsupra), Iear.ned Standi Counsel for thr: Income Tax Department contends that those wou unnecessarily burden the Income Tax Department where they would be reqr-rired to file equal number ol SLps before the Hon'ble Suprerne Court and it would be further burdening the exchequer of the Union of India. It was also rhe conleStion of the leamed Standing Counsel that no prejudiee would be caused to the interest of the petitioners in case if this writ petition is kept pending till the finalizarion of the SLps pending before the Hon,ble Supreme Court and the fact that the petitioner is atready enjoying the benefLt of interim protection. Nonetheless, on the earlier query of this court as to why the lncome Tax Department have not come out r'vith a mechanism to issue appropriate instructiol: or to take -\ 7 appropriate steps in ensuring tirat proceedings under Section 148A of the Act as aiso the assessmen[ 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 iearned Standing counsel that the said steps can onry be taken at the rever of cBD'r as any such steps would have to be taken Pan India and cannot be limited to any of these jurisdictional High Coutts' 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 t{igh Court allowing writ petitions on the very same 'l'ax authorities concemed are still even now in issue. The lncome 2025 also initiating proceedings in contravention to the provisions of Section 15 I A of the Act and as a result by no*' *io1" than 600 to 700 petitions have been already got piled up before this High Court on an issue which other-wise stands squarely covered by the judgment of this Court in the case ol Kanukala Ravindra Reddy (l supra). What is also surprising is the fact that though rvhile allowing the writ petitions in the case of Kanakala Ravindra Reddy (l supra), the Division Bench while reserving the right ol the Revenue, has also protected the interest of the petitioners \ 8 lnsofar as rnltiating frt:sh proceedi provtsions of the Act, the Finance \ct,2021. the liberty which was granted to the Revenue for ngs strictly in accordance with the amended as amended by the Finance Act, 2020 and The petitioner assessee would be entitled to he other legal objections ifthe Revenue initiates The Department has made no endeavour in erty that was reserved for the Revenue. On the been still sticking on ro the stand, which this 45 rDany other High Courts already held to be challenge or raise t fresh proceedings. availing the s;aid lib contrary, they have High Courr as well bad. th" ,manner, I l. It appears that because ofthe aforesaid liberty thar this High court had granted permitting the Revenue for initiating liesh proceedings as a one_time measure in a faceless Income Tax Department wants to take advantage of the same by protracting these proceedings which would enable them to meet the limitation that would otherwise come in the way. Likewise, if the writ petition is kept pending for a considerable long period of time and finally at a later stage if the Hon,ble Supreme Court confirrns the decision taken by this High Courr as also by rhe orher High Courts in which the SLps are still pending, the Income Tax / ,/.,, 9 Department would get the advantage ol the liberty that is otherwise protected in favour of the Revenue lor initiation of fresh proceedings from the disposal of these matters at a much la[er stage which would be advantageous and benef,rcial to the Revenue and would be equally disadvantageous and detrimental so far as interest of the assesses are concerned. 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 setin Kanakala Ravindra Reddy (l supra), is a matter of grave concern. The Income Tax Department's persistent initiation of fresh proceedings, disregarding the established judicial ,l pronouncements, has led to an unprecedented surge in titigation with over 600-700 petitions piling up on the same issue' This deliberate approach not oniy undermines the principle ofjudicial precedent but also strains the judicial resources unnecessarily' The Department's strategy of awaiting the Supreme Court'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 adhering to the established legal \\ t, -*- 10 !- \ .F-.a administrative efficiency and thc posttion. Such conduct raises serious questions about the respect for judicial pronouncements, particularly when this Court has ah.eady provided a balanced approach by preserving both the Revenue,s rights and assesses interests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Deparlment itself and should have found out via media in ensuring that proceedings under Sections l4g_A and 14g should not have been issued in a faceless manner, at least till the Hon,ble Supreme Court decide the twelve hundred (1200) odd SLps which it is already seized of or, ar least the Income Tax Department should ha,,re fbund out some remedial steps to ensure that wherever the authorit,iep intend to initiate proceedings under Sections l4g_A and l4g, orher rhan in a faceless manner, the proceedings shourd have been deferred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after the SLp,s are decided by the Hon'ble Supreme Court on the very same issue. This again, the Income Tax Department, has not been able to give a convincing repl.r, except for the fact that such a decision if at all I I has to be taken, has to be taken fbr the whoie of tndia' and which other-wise has to be by way of a policy decision and that too at the Ievel of Central Board ol Direct Taxes. Though the leamed Standing Counsel for the Income Tax Deparlment 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 ths floors of this t{igh Courl resulting in filing of hundreds o[ new writ petitions which in the long run not only aflects thc 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 olthe matterbeforetheHon,blesupremeCourthavingbcentakenon many occasions, the Hon'ble Supreme Couft which is seized of the matter has been reluctant in granting any interim protection to the lncome Tax Department. Yet, the authorities concerned at the State level are not ready to accept the verdict passed by a majority of High Courts 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 "___- a_ ) ) 12 r 148 through the jurisdictional {5sg55ing Oflicer whereas it oughr COMMISSIONER, to have been only in the 1hceless manner. 14. In rhe case of BANK OF INDIA vs. ASSISTANT INCOME TAXIr, on an issue whether ir was justifiable on the part of the Income Tax Deparrment in not following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Division Bench of rhe High Court of Bombay he ld at paragraph No.25 as under, viz., : h" t'9htl' drawn out attention to the of lncome Tax vs' smt' arso the recent decision of the co- "25. Mr.. paridwa decision of this court .n Godavaridevi s".rt,, uco"issioner ordinate Bench of mis cc' or which one or us ,r,.,,J: : :.il:,.fi'J:'J:"i:l,::1, ;^"r,:; the court categoricaly observed that the Revenue having not "accepted,, the judgment of the High Court would not meAn fhat till the same is sel aside in a manner known to law, it would ldose its binding force. Referring to the decision of the Supreme Court in Union of lndia vs. Kamtakshi Finance Corporation Ltd.14, the Court observed that the approach of the oflicials of Revenue of treating decisions being "not acceptable,, was criticized by the Supreme CoLlrt. ln such decision, following are the re,evant observations rnade by the Supreme Court. a I t t r2025) I 70 ta> mann.com 422 (Bombav)l ', fffi' u, ttp- :89 G^*@ 00 Taxman 452 (Bombay) - - 'ttr,.,":ilTfi**ffi"";;l3f1s. a. 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 appellate 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 tha Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Coltectors and the Appellate Collectors who function under the jurlsdiction of the Tribunal. The principles of judicial discipline require lhat 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 \ \ 74 rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws.

12. We have dealt with this aspect at some length, bet;ause it has been suggested by the learned Adclitional Solicitor General that the observations made by the High Court, have been harsh on the officers. lt is clear that th, court, seeminsry r"r""r"#"t"'IJt "jJ::rl:; unpalatable to the Revenue, are only intended 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 take lhese observations in lhe proper spirit. The observations of the High Court shourd be kept in mind in future and the utmost regard shoutd be paid by the adjudicating authorities and the appellate authorities to the requrrements of judicial discipline and the need for giving effect to tne orJers of the higher appellate authorities which are binding on them." 15 what is wonying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further iitigation on issues which have been laid to rest by a large number of High, Courts all of whom have taken a consistent stand that the action of the Income Tax Deparlment being violative olthe I I 15 Finance rlct,2020 and Finance Act'2021' Now' in order to protect the intercst of the Revenue as also that of the assessee' it would bc trite at ihis juncture, il lr'e dispose of the writ petition rvitl'r an obser.ration/direction that the disposal of the instant writ petition in terms of the judgment rendcred by this High Court in thc casc ol Kunkanala Ravindra Reddy (.1 supra) shall however be subject to theoutcomeotthesLPswhichwerelrledbythelncomeTax Department and which is pending consideration before the Hon'ble Supreme Court.

16. In the given iacts anci 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 Jarious other High Courts on the very same issue, the pendency of this High Court 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 concemed, we are of the considered opinion that the interest olthe Revenue has already been considered and protected, as has been observed in paragraphs 76 36,37 and.]8 ofthe order which, for ready reference, rs reproduced hercuncler "no

36. For all the aforesaid r iss ued and tne proceeoins,e;:Hj?TJT:il:::T Department is neither tunuo'"' nor sustainabre. The notices so issued perseillegal,deserves.otheProcedureadopledbeing be and are accordingly set asirje/quashed. As a cons t"o'"n"u' all the impugned orders getting quashed. ,n" by the respondur.o"r"nrlli ,rtJ:: ;";: ff:: issued under Section 14. 148would also get quashed and it is ora"r"o7,and accordingly. The reason we are rtruashing lhe conseguential order is on the principles that when the initiation of the proceedings itself was proc,3durally wrong, the sul )sequent orders arso gets nu,if;ed automaticary.

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 rlotices and orders are getting quashed on the point of jurisdiction, we are not inclined to further and decider the other issues raised by the petitioner which stands reserved to be raised and conlended in an appropriate proceedings. .proceed 38 of Ashish Since the Hon,ble Supreme Court had, in the case Agarwal, supra, as a one{ime measure the powers under Article 142 exercising of the Constitution of lndia, permitted lhe Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right I L7 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 Agarwal, suPra i8. We would only turther like to make observations that stnce 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 o[ Kanakala Ravindra Reddy (l supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No'3574 of 2024' preferred by the Income Tax Depaftment' we make it clear that altowing of the instant writ petition is subject to outcome of the aforesaid SLP prefened by the Revenue against the decision ofthis High Courl in the case of Kanakaltt Ravindra Reddy (l sttpra)' This, in other words, would mean that either of the pgties' 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 Court in the pending SLP on the very same issue' I 9. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction 1S conccmcd. As a consequence, the impugned notice under chalienge under Sections 148-A and 148 stands set aside/quashed 18 "- ( The consequential orclers, if any, also stand set aside/quashed in similar tenns as have been passed by this High court in the case of Kunkanala Rqvindra Reddy (I supra). .fhere shalt be no order as to costs Consequently, miscellaneous petitions pending, if any, shatl stand closed. //TRUE COPYII To, ] Inu Income Tax offi,.c,t \^r-.A I A,:, , n;l+fl '#;;i#'ifl AssrssrDlN? lHl3ffiH G. sEcrloN oFFICER ii{:L?ff::ils"#:'", "i!,if,,**;rIrlfli?:ffi 'Jifi , |p1v^peltri_tt0ooi'.ruvc'I;menr _- i:inl'"''".a1 "ffi 5. The Secretarv h) th€ """:lEl?,::1fi '"?'m:#:: jSl*."X,8i,:[X:S#[?,liBifl5,l;,,l,, F:tceless Assessment center, Income Tax Department, New '"6%?E#lin|;i;[B'iffi :,i,H[H;j:T":::i$::,"'Revenue ,{ BIE B3 lB y; ei.iu;ltha rJu.nioi'st i6'. riiofr"u r,*r-rbpudi 5 ;;; ;; 3";[y'"' Praveen Kumar' Deputv soticitoi dJneiJtr rnoirloeucl r J GJFh #L HIGH COURT DATED:2BtO4t2O2S 2 o stP zoE -..,, ORDER WP.No.33 424 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS "-lt -,/