PRIIMARY AGRICULTURAL CO OP RATIVESOCIETY LTD v. all lncome Tax Office, Nirmal, Nirmal

QBDEB' @er Hon'ble Sri Justtce Na Rao Nandikonda) Heard Mr.Thanneru Chait ya Kumar, learned counsel for the petitioner, Ms.J.Sunitha, I ed Junior Standing Counsel for the Income Tax Department r respondent Nos.l to 4 and Mr. B. Mukherj ee, leamed counsel resenting the Union of India for respondent No.5. Perused the ord.

2. This is a writ petition whe the proceedings are either challenged to the notices which we e istued under Section l48A and 148 of the Income Tax Act, 19 I (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 n up today only on one ofthe grounds, that the notices issued er Section 148A of the Act and the subsequent initiation ofpro dings under Section 148 of the Act by the jurisdictional Assess Officer, whereas in terms { of thqamendment that was brought the Income Tax Act by way 2 of Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings under Section 1484. ofthe Act as also under Section 148 ofthc 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 violation of the Finance Act. 2021 i.e., the impugned notices under Section 148A and Section 148 ofthe Act not being issued in a faceless manner, have already bcen dealt with and decided by this Couft 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 l48A as also under Section i48 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Scction I 5 I A of the Act read with Notification 1812022 dated 29.03.2022. The said judgment passed by this Court has also been subsequcntly followed in a large number of writ petitions which were allorved on similar terms. 'l(20231 156 taxmann.com 178 (Telangana)l 3

5. Down the line, we find that th'e; sarno,issrtd,has also. been decided against the Revenue vanous High Courts i.e., by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. AS ISTANT COMMISSIONER OF TNCOME TAX & OTHERS2, uhati High Court in the case of RAM NARAYAN SAH vs. ON OF INDIA3, Punjab and Haryana High Court in the case of ATINDER SINGH BANGU vs. UNION OF INDIA4, and Telan ana High Courl in the case of SRI VENKATARAMANA REDD PATLOOLA vs. DEPUTY COMMISSTONER OF INCOME TAX5 where the issue was in respect of international taxation, Bo bay High Court in the case of ABHIN ANTLKUMAR SHAH vs TNCOME TAX OFFTCE& INTERNATTONAL TAXATION6 hich is again on international taxation and central circle, High Co rt of Himachal Pradesh in the case of GOVIND SINGH vs. I COME TAX OFFICERT, Gujarat High Court in the e of MANSUKTIBHAI ' yzoz+1464 ITR 430 (Bom) 'L(2024) 156 taxmann.com 478 (Gauhat 2(t 4 20 5 t 2024 1202 7 [2024) 165 taxmann.com 113 (Hiruac 65 taxmann m 5 (PunJ 7 taxlnann com 4 taxmann m 67 (B om ) I I) EI I I 9 (r 1) ba l 4 11 6 t) 6 )l )l ab & Haryana)l I Pradesh)l 4 DAHYABHAI RADADIYA VS. INCOME TAX OFFTCER, WARD 3(3X5)8, 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, TNCOME 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 High Court in the case of GIRDHAR GOPAL DALIUIA vs. UNION OF INDIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024.

6. Even though the sam'e issue having been decided by a large number of High Courts, we are still confronted with large filing of identical rnatters on daily basis ranging between 5 to 10 writ petitions. That upon the instructions being sought fiom 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 szozqSCC online Guj 4012 " 2025 SCC Online Jhar 287 'o 12023 : RJ-JD : 49 84-DBl '+; 5 (1 supra) has been subjected to challenge in a Special Leave Petition i.e., SLP No.3574 of 202 before the Hon'ble Supreme Court and the Hon'ble Supreme ourt is seized of the matter In addition, there are about 1200 S Ps also filed arising out of the same issue being decided by variou High Courts

7. To a query being put to the I counsel for the Revenue, they have categorically accepted fact that there is no interim order granted by the Hon'ble Su reme Court in any of these matters pending before it. Mean hile, fresh writ petitions of identical nature are being piled up b fore this Bench on daity basis and the pendency is getting increas on matter which otherwisc has already been dealt and decided b this very High Court itself.

8. On the one hand, even thou the order of this Court that was passed as early as on 14.09.20 3 and more 16 months have lapsed, till date, we do not find an remedial steps having been taken by the Income Tax Departme t to take appropriate steps to either hold back issuance of notice der Section 148A and under Section 148 of the Act by the ju ctional Assessing Officer, rather the authorities concerned in e teeth of series of decisions 6 by ail the major High Courts in India are continuously still initiating proceedings under Section 1484, of the Act and also initiating proceedings under Section 148 of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act, 2O2O 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 Income Tax Depafiment 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 Coufi and it would be further burdening the exchequer of the Union of India. It was also the contention of the leamed Standing Counsel that no prejudice would be caused to the interest of the petitioners in case if this writ petition is kept pending till the hnalization of the SLPs pending before the Hon'ble Supreme Court and the fact that the petitioner is already enjoying the benefit of interim protection. Nonetheless, on the earlier query of this Court as to why the Income Tax Department have not come out with a mechanism to issue appropriate iUU*gi"i, or to take 7 appropriate steps in ensuring that p eedings under Section 148A of the Act as also the assessment rders under Section 148 of the Act are kept in a hold in the light o the decisions dedcided by the various High Courts, it was sub tted by the learned 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 gh Courts.

10. As a result of which, what w are facing is steep increase of litigation day in and day out even ugh various orders have been passed by this High Court allowing rit petitions on the very same issue. The Income Tax authorities ncemed are still even now in 2025 also initiating proceedings in ntravention to the provisions of Section l5lA of the Act and as a result by now, more than 600 to 700 petitions have been already ot piled up before this High Court on an issue which otherwise ands squarely covered by the judgment of this Court in the case f Kanakala Ravindra Reddy ( 1 supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kanakala Ravindra Reddy (1 supra), the Division Benc while reserving the right of the Revenue, has also protected e interest of the petitioners I I l .:-:i ;. ..: . l rl!J ii: t. f 'vhi rh rl irs gra-nted to the Revenue ior initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Finance Act,2020 and the Finance Act, 2021. The petitioner assessee would be entitled to challenge or raise the other legal objections if the Rerenue initiates fresh procecdings. The Department has made no endeavour in availing the said liberty that was reserved for the Revenue. On the contrary, thcy have been still sticking on to the stand, which this High Court as weli es many other High Courts already held to be bad. 1 1. It appears that because of the aforesaid liberty that this High Court had qranteci permitting the Revenue for initiating fresh proceedings as a one-time measure in a faceless manner, the Income Tax Department wants to take advantage of the same by protracting these proceedings which would enable thern 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 confirms the decision taken by this High Court as also by the other High Cou:ts iir whic:r 'hq SI-Ps are still pending, the Income Tax t 9 Departmeqt would get the advantag of the liberty that is otherwise protected in favour of the Rev nue for initiation of fresh proceedings from the disposal ofth e matters at a much later stage which would be advantageous and eneficial to the Revenue and would be equally disadvantageous d detrimental so far as interest of the assesses are concemed. As a consequence, the Income Tax Department gets an extended period of time for initiation of fresh proceedings

12. The alarming trend of docket losion in this Court, despite the clear precedent set in Kanakala avindra Reddy (1 supra), is a matter of grave concern. The Incom Ta< Department's persistent initiation of fresh proceedings, disre ng the established judicial pronouncements, has led to an edented surge in litigation with over 600-700 petitions piling p on the same issue. This deliberate approach not only un nes the principle of judicial precedent but also strains the judicial resources unnecessarily. The Department's strategy of awaiting the Supreme Court's decision on pending SLPs while continuing initiate fresh proceedings appears to be a calculated move buy time and circumvent limitation periods, rather than. adh g to the established legal 10 position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncements, particularly when this Court has already 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 lncome Tax Department itself and should have found out via media in ensuring that proceedings under Sections 148-A. and 148 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 ofor, at least the Income Tax Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should 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 Ineome Tax Department, has not been able to give a convincing reply, except for the fact that such a decision if at all l'L has to be taken, has to be taken fo the whole of India, and which otherwise has to be by way of a po cy decision and that too at the level of Central Board of Direct Taxes. Though the learned Standing Counsel for the Income Department contended that the Delhi High Court dismissed a t petition of similar nature, on I the one hand when the High Co 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 of new writ petitions which in the long run not only affects the di osal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily bas s Admittedly, in spite of rhe matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Supre Court which is seized of the matter has been reluctant in granti any interim protection to the Income Tax Department. Yet, the authorities concemed at the State level are not ready to accept th verdict passed by a majority of High Courts of different States o the same issue; and to make things further worse, the Income ax Department is showing audacity by issuing notices continuou ly under Sections 148-4. and I I 72 i." t, 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 TAXl1, on an issue whether it was justifiable on the part of the Income Tax Department in not following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Divisiou Bench of the High Court of Bombay held at paragraph No.25 as under, viz., : "25. Mr. Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafl2 as atso the recent decision of the co- ordinate Bench of this Court in Samp F0rniture (P) Ltd. v. lTO13 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 loose its binding force. Referring to the decision of the Supreme Court in Union of lndia vs. Kamlakshi Finance Gorporation 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 decision, following are the relevant observations made by the Supreme Court. 1' 12 7120251170 taxmann.com 422 (Bombay)l 1t9781 113 ITR.589 (Bombay) " 1ZOZ41l65 taxmann.com 581/300 Taxman 452 (Bombay) 'o ltggZltaxmann.com 16/55 ELT 433 (SC) {. -. .r-.*r&.,.. i 13 '6. Sri Reddy is perhaps officers were not actuated passing the impugned o genuinely felt that the claim tenable and that, if it was would suffer. But what Sri Re are not concerned here otherwise of their conclusi malafides but with the fact tha ht in saying that the by any mala fides in ers. They perhaps the assessee was not ccepted, the Revenue dy overlooks is that we th the correctness or of any factual the officers, in reaching in their conclusion, by-passed regard to the same issue wh two appellate orders in ch were placed before them, one of the Collector ( peals) and the other of the Tribunal. The High Court as, in our view, rightly criticized this conduct of the ssistant Collectors and the harassment to the assess of these officers to grve e authorities higher to them in th cannot be too vehemenlly e utmost importance that, i quasi.iudicial issues before the caused by the failure ct to the orders of appellate hierarchy. lt phasized that it is of disposing of the , revenue officers are bound by the decisions of th appellate authorities. The order of the Appellte Coll Assistant Collectors working wi ctor is binding on lhe hin his jurisdiction and the order of the Tribunal is bin ing upon the Assistant Collectors and the Appellate under the jurisdiction of the Tri judicial discipline require that llectors who function nal. The principles of orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. he mere fact that the order of the appellate authority the department - in itself an and is the subject matter of an ground for not following it unl been suspended by a compete is not "acceptable" to ectionable phrase - ppeal can furnish no s its operation has court. lf this healthy 16 1: 36,37 and 38 ofthe 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 "suslainable. The notices so issued and the procedure adopted being 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-Deparlmenl pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.

37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders are 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 contended in an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one{ime measure exercising the powers under Article 142 of the Constitution of lndia, permifted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right 17 conferred on the Revenue proceed further if they so order of the Supreme Co Agarwal, supra. uld remain reserved to nt from the stage of the rt in the case of Ashish

18. We would only further like t make observations that sinoe we are inclined to dispose of the in ant writ petition, conscious of the fact that the earlier order of is High Court in the case of Kanakala Ravindra Reddy (l SU a) is subjected to challenge before the Ho4'ble Supreme Cou in SLP No.3574 ol 2024, I preferred by the Income Tax Depa ment, we make it clear that allowing of the instant writ petitio is subject to outcome of the aforesaid SLP preferred by the Rev ue against the decision of this High Court in the case of Kanaka Ravindra Reddy (l supra). This, in other words, would mean th t either of the parties, if they so want, may move an appropnate tition seeking revival of this writ petition in the light of the deci ion of the Hon'ble Supreme Court in the pending SLP on the very ame lssue

19. Accordingly, the instant writ petition stands allowed rn favour of the assessee so far as he issue of jurisdiction IS concemed. As- a consequence, t e impugned notice under challenge under Sections 148-A and 48 stands set aside/quashed. The consequential orcers, if any, also stand set asidc/quasheo in similar terms as have been passed by this High Court in the case of Kankanala Ravindra Reddy (1 supra). There shall be no order as to costs Consequently, miscellaneous petitions pending, if any, shall stand ctosed //TRUE COPY// \' SD/.A. JAYASREE s\srnur REGISTRAR SECTION OFFICER "' \ To, ; ip;f,161':,:*t*Hffiffi ffi:'"H ,*#il* t: 'ir'ig"na*r**?i'Eil,'tr":'":;ffi""x'i:i'151"33[[i*'?"J'1iiffi ii"*"o6ini - r to oot Assessment center, rncome Tax Department' New 4. The National Faceless . ?f;I'rn'on or lndia, --ffimF;+i,Wu';df ht##'l: t**gill$g+:Iffi 9. Two CD Copies B M LS -,iilr'l*5:.... .Jii&.t 3 . rsa!lriA61+ HIGH COURT DATED:2810412025 ORDER WP.No.33723 ot 2024 fi. lllC 5p4l o( 1{ il0 2ffi /S {';! * * :\. (1 cl, -: /, ALLOWING THE WRIT PETITION WITHOUT COSTS / 4,.1. /5/ 7k5 €