Smt. Narsawa Gaddam v. uls.271(1)(c) of the Act, respectively

challenged to the notices which were issued under Section 148A and 148 of the Income Tax Act, 1961 (for short 'the Act') or the assessment orders those have been passed under Section 147 of the Act which have been assailed.

3. This writ petition is being taken up today only on one of the grounds, 'wn e notices issued under Section 148,4. 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 of Finance Act, 2021 w.e.f., 0l .04.2021 onwards, proceedings / s* ,/ "\,'t under Section 148,{ of the Act as also under Section 148 of the Act ought to have also been issued and proceederl in a faceless manner

4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Act. 2:fi21 i.e., the impugned notices under Section 148.4 agrd Section 148 of the Act not being issued in a faceless manner, have aiready been dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICER' decided on 14.09.2023 whereby a tratch of writ petitions wc,re allowed and the proceedings initiated under Section 148A as also under Section 148 of the Act were held to be bad with consequentirtl reliefs on the ground of it being in violation of the provisions of Secrion 151A of the Act read with Notification 1812022 dated 29.03.1102:2. The said judgment passed by this Court has also been subseqtLently followed in a large number of writ petitions which were allo reC on similar terms. ' l(2023) 1 56 taxmann.com 178 (Telangana)l 1 .,

5. Down the line, we hnd that the same issue has also been decided against the Re venue by various High Courts i.e., by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauf;ati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA3, Punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI VENKATARAMAN.A. 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. INCOME TAX OFFICERT, Gujarat High Court in the case of MANSUKIIBHAI 'lz0z+1464 nn +:o 6om; ' l(2024) 156 taxmann.com 478 (Gauhati)l " 1Q024) 165 taxmann.com I l5 (Punjab & Haryana)l ' [2024) I 67 taxmann.com 4l I (Telangana)] " 12024) 166 taxmann.com 679 (Bombay)l '12024) 165 taxmann.com I 13 (Himachal Pradesh)l a t i I..t \ 4 DAHYABHAT RADADIYA vs. INCOME TA.X OFFICER, WARD 3(3XO8, Jharkand High Court in the case of SHYAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan l{igh Court in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ pt:titionsro which stood decided on 19.03.2024. Similar views have rls,c been taken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 ot2023), decided on25.09.2024

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 betweer 5 to 10 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 Kanakala Ravindra Reddy t2024 SCC Online GuJ 4Ol2 '2025 SCC Online lhar287 o yzo23 : RI-JD :49 84-DBl ' 1 5 (1 supra) has been subjected to challenge in a Special Leave Petition i.e., SLP No.3574 of 2024 before the Hon'ble Supreme fii, Court and the Hon'ble Supreme Court is seized of the matter. In addition, there are about 1200 SLPs also filed 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 interim order granted by the Hon'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 itsell

8. On the one hand, even though the order of this Court that was passed as early as on 14.09.2023 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 hold back issuance of notice under Section 148,4. and under Section 148 of the Act by the jurisdictional Assessing Officer, rather the authorities concemed in the teeth of series of decisions D f, I by all the major Hign Courts in India are continuously still initiating proceedings under Section l48A of th,: r\ct and also initiating proceedings under Section 148 o1 :he Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Acl 2021

9. Upon a query being put os to why can't this writ petition be disposed of in the teeth of the decision rendered f,y this Court in the case of Kanakala Ravindra Reddy (l supra), leanred Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to file equal number of Sl.Ps before the Hon'ble Supreme Court and it would be further br.rrdening the exchequer of the Union of India. It was also the contention of the leamed Standing Counsel that no prejudice would t,e caused to the interest olthe petitioners in case if this wdt petition is kept pending till the finalization of the SLPs pending befor: the Hon'ble Supreme Court and the fact that the petitioner is already enjoying the benefit of interim protection. Nonetheless, on the ,3arlier query of this Court as to why the Income Tax Department have not come out with a mechanism to lssue appropriate instructions or to take 7 appropriate steps in ensuring that proceedings under Section l48A of the Act as also the assessment orders under Section 148 of the Act are kept in a hold in the light of the decisions dedcided by the various High Courts, it was submitted by the leamed Standing Counsel that the said steps can only be t4ken 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 ol 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 Tax authorities concemed are still even now in 2025 also initiating proceedings in contravention to the provisions of Section l51A 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 Kanaksla Ravindra Reddy (l supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kanakala Rsvindra Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners t n 8 r-tl insofar as the tiberty which was granted to the Revenue for ! initiating liesh proceedings strictly in accordance u'ith the amended provisions ol-the Act, as amended by the Financr: Act, 2020 and the Finance Act,202l. The petitioner assessee wor.ld be entitled to challenge or raise the other legal objections if the F.er,enue 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 pticking on to the stanl, which this High Court as well as many other High Courts already held to be bad. I l. It appears that because ofthe aforesaid liberty that this High Court had granted permitting the Revenue for inrtiating fresh proceedings as a one-time measure in a faceler;s manner, the Income Tax Department wants to take advantage rf the same by protracting these proceedings which would enable them to meet the limitation that would otherwise come in the way. l-ikewise, if the writ petition is kept pending for a considerable long pr:riod of time and finally at a later stage if the Hon'ble Supreme Court confirms the decision taken by this High Court as also by the other High Courts in which the SLPs are still pending, th,: l.ncome 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 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 Department gets an extended period of time for initiation of fiesh proceedings.

12. The alarming trend of docket explosion in this Court, despite the clear precedent set in Kanakala Ravindra Reddy (l supra), is a matter of grave concern. The Income Tax Department,s persistent initiation of fresh proceedings, disregarding the established judiciat pronouncements, has led to an unprecedented surge in litigation with over 600-700 petitions piling up oh the same issue. This deliberate approach not only undermines the principle ofjudicial precedent but also strains the judicial resources unnecessarily. The Depaftment'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 ) I ! 10 position. Such conduct raises serious questicns about the administrative efhciency and the respect fbr judicial pronouncements, particularly when this Courl has aJready provided a balanced approach by preserving both the Reverue's rights and assesses lnterests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Departmr:nt itself and should have found out via media in ensuring that proceedings under Sections 148-4 and 148 should not have be,en issued in a faceless manner, at least till the Hon'ble Supreme Court decide the twelve hundred (i200) odd SLPs which it is already seized ofor, at least the Income Tax Department should have found out some remedial steps to ensure that wherever the authoritir:s intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should have ber:n deferred without precipitating the matter further intimating the a.ssessee 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 beerL able to give a convincing reply, except for the fact that such a decision if at all -*'a 7-1, I has to be taken, has to be taken for the whole of India' and which otherwise has to be by way of a poticy decision and that too at the tevel of Central Board of Direct Taxes' Though the learned Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of similar nature' on 4 theonehandwhentheHighCourtisstrugglingtoreduceits 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 hling of huridreds of new writ petitions which in the long run not onty aff6cts 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'bte Supreme Court having been taken on many occasions, the Hon'ble Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the Income 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 same issue; and to make things further worse, the Income Tax Department is showing audacity by issuing notices continuously under Sections 148-A and t. '/rj ,/ l .l 72 148 through the jurisdictional Assessing Officer vrhereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. I\SSISTANT COMMISSIONER, INCOME TAXrr, on an issut: uhether it was justifiabte on the part of the Income Tax Departmeut in not following an order passed by the adjudicating authcrity only on the ground that the appeals are pending, the Divisiorr f]ench of the High Court of Bombay held at paragraph No.25 as t nder, viz., : "25. Mr. Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of Income Tax vs. Smt. Godavaridevi Saraflz as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) Ltd. v. lTOt3 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 nrean that till the same is set aside in a manner known to law, it would loose its binding force. Referring to the decision of the Supre,ne Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.14, the Court observed that the approach of the officials of levenue of treating decisions being "not acceptable" was criticized by the Supreme Court. ln such decision, following are tie relevant observations made by the Supreme Court. " 71ZOZs1 170 taxmann.com 422 (Bombay)l '' 1t9281 I l3 I'tR 589 (Bombay) '3 1ZO2+1 165 raxmann.corn 581/300 Taxman 452 (Bombayt 'o TtggZl raxmann.com t6155 ELT 433 (SC) 13 "6. Sri Reddy rs 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 Coltector (Appeals) and the other of the Tribunal. The High Courl has, in our view, righfly criticized this conduct gf the Assistant Collectors and the harassment to the assessee caused by the failure of these officerq to give effect to the orders of authorities higher to them in the appellate hierarchy. lt cannot be too vehemenfly emphasized that it is of utmost importance that, in disposing of the quasUudicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellte Co ector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate 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 foltowing it unless its operation has been suspended by a competent court. lf this healthy a $B l \ \r\ t4 rule is not followed, the result will only be unrlue harassment to assesses and chaos in administration of tax laws.

12. We have dealt with this aspect at some ength, because it has been suggested by the k:arned Additional Solicitor General lhat' the obsen'atir>ns made by the High Court, have been harsh on the officers. lt is clear thatthe observations of thr) High Court, seemingly vehement, and appilre ltly unpalatable to the Revenue, are only intended tc curb a tendency in revenue matters which, if allowed to become widespre4fl, 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 these observations n the proper spirit. The observations of the High Court should be kept in mind in future and the ulmost |egard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judioial discipline and the need for giving effect to the ,)rders of the higher appellate authorities which are binding on them."

15. What is worrying this Bench more is th,: Fact that an endeavour is being made whole heartedly 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 that the action of the lncome Tax Department being violative of the 15 Finance Act,2020 and Finance Act,202l. 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 Kankanala Ravindra Reddy (l supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Department and which is pending consideration before the Hon'ble Supreme Court.

16. In the given facts and circumstances, this Bench is of the considered opinion that unless and until we do not timely dispose of matters which are squarely covered by the decision of this Court and which stands fortified bv the decisions of the various 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 ofas a covered matter 11 . So far as the interest of the Revenue is concemed, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs Q I \h I 't6 36,37 and38 ofthe order which, for ready referenct:, is rcproduced hereunder: 1 \

36. For all the aforesaid reasons, the impugnerl notices issued and the proceedings drawn by the reslorrdent- Department is neither tenable, nor sustainable. The notices so issued and the proiedure adopt3d berng per se illegal, deserves to be and are accordlng y set aside/quashed. As a cbnsequence, all the irnpugned orders getting quashed, the consequential orderr; passed by the respondent-Department pursuant to th(r n'ltices issued under Section 147 and 148 would also get quashed and it is,erdered accordingly. The reason we are quashing the consequential order is on the t'rinciples that when thd initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullifi ed automatically.

37. The preliminary objection raised by the pe'itioner is sustained and all these writ petitions stands allcwed on this very .jurisdictional issue. Since the impugnerj n'ltices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed furlher and decide the other issues raised by the petition:r which stands reserved to be raised and contended n an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in th€' case of Ashish Agarwal, supra, as a one{ime measure exercising the powers under Article 142 01 the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, .he right 77 conferred on the Revenue would remain reserved to proceed further if lhey so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra.

18. We would only further like to make observations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of 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 Tak Department, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLp preferred by the Revenue against the decision ofthis High Court 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 Court in the pending SLp on the very same issue. I I

19. Accordingly, the favour of the assessee rnstant writ petition stands allowed in so far as the issue of jurisdiction is concemed. As a consequence, the impugned notice under challenge under Sections l4g_A and 148 stands set aside/quashed. ( ( \ i I t { I l I I 18 The consequential orders, if any, also stand set asid,:/quashed in similar terms as have been passed by this High Court in the case of Kankanala Ravindra Reddy (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 YhPP SECITON O FFICER To, 'l . Assessment Unit, National Faceless Assessment Centre, lncome Tax Depa(ment, tvinistry of Finance, Room No. 401 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadi0m, Delhi - '1 10 003. t!

2. The lncome Tax Officer, Ward - 1, lncome Tax Office, 3-2-156/3, Subhash Nagar, Nizamabad - 503002.

3. One CC to SRl. A V RAGHU RAM Advocate IOPUC] 4. One CC to Ms. J SUNITHA (JUNIOR SC FOR INCOM= l'AX) [OPUC] 5. Two CD Copies KKS GJP 0p- HIGH COURT I DATED:2810412025 \- ( \\. -<'\, ( ;.' , C. l i- /, ./, O3 SEPU6 -.:,2' I ORDER WP.No.33554 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS (-t- h 7