PRIMARY AGRICULTURAL COOPERATIVE SCIETY LTD v. 1. The Income Tax fficer Ward 1

Counsel for the Petitioner : SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1 to 4 : Ms. J.SUNITHA IJUNIOR SC FOR lNcoME TAX) Counsel for the Respondent No.S : SRI B.MUKHERJEE, LEARNED COUNSEL REPRESENTING THE UNION OF IND]A The Court made the following ORDER THE I{ONOURABLE SRI JUSTICE P.SAI\{ KOSHY A}ID THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITIONNo.3433I oF 2024 ORDER, @er Hon'Ne Sri Justice Narsing Rao Nandikonda) Heard Mr. Than nes Chaitanya Kumar, leamed counsel for the petitioner, Ms. J.Sunitha, Iearned Junior Standing Counsel for the Income Tax Department for respondent Nos.l to 4 and Mr. B. Mukhe{ee, learned counsel representing the Union of India for respondent No.5. perused the record.

2. This is a writ petition where the proceedings are either challenged to the notices which were issued under Section l4gA and 148 of the Income Tax Act, 196l (for short ,the Act,) or the assessment orders those have been passed under Section 147 of the Act which have been assailed. L This writ petition is being taken up today only on one of the grounds, that the notices issued under Section 14EA of the Act and the subsequent initiation ofproceedings under Section l4g of the Act by the jurisdictional Assessing officer, whereas in terms of the amencimenr that was brought to the Income Tax Act by way 2 of Finance Act, 2021 w.e'f', 01'04'2021 onwards proceedings under Section 148A of the Act as also under Section 148 of 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 violation of the Finance Act 2021 i'e" the impugned notices under Section 148,4. and Section 148 ofthe Act not being issued in a faceless manner, have already been dealt with and decided by this Court in the case of I(AIIKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions w':re allowed and the proceedings initiated under Section 148,{ as also under Section 148 of the Act were held to be bad with consequentral reliefs on the ground of it being in violation of the provisions of llection 15lA of the Act read with Notit-rcation l8l2}22 dated 29'03 2022' T}lLe said judgment passed by this Court has also been subsuluently followed in a large number of writ petitions which were allcwed on similar '[(2023) 156 taxmann.com 178 (Telangana)l 3

5. Down the line, we find that the sane issue has also been deoided against the Revenue by various High Courts i.e., by the Bombay High Court in the case of IfEXAWARE TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTIIERS2, Gauhati High Courr in the case of RAM NARAYAN SAH vs. UNION OF INDIA3, punjab and Haryana High Court in the case of JATINDER SINGII 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 ABHTN ANILKUMAR SHAH vs. INCOME TAx OFFICE& INTERNATIONAL TAXATION6 which is again on international 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 \\ 'Tzoz+1464 ITR 430 (Bom) 'tQ024) 156 taxmann.com 47g (Gauhati)l ^ [(2024) 165 taxmann.com I l5 (punjab & Haryana) '12024) l6J.raxmann.com 4l I (Telangana)l " [2024) 166 taxmann.com 679 (Bombay)] ' [2024) 1 65 raxmann.co- f f : (Hi-actrai pradesh)] 4 a DAITYABHAI RADADIYA VS. TNCOME TAX OFFICE& WARD 3(3X$8, Jharkand High Court in the cas'r of SIIYAM SIINDAR SAW vs. uNION OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CIIHAJER vs' INCOME TAX OFFICER & ANOTHER and batch of writ peritionsro which stood decided ot 19.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs' UNION OF IhIDIA & ORS (M.A.T 1690 ot 2023), decided on 25'09'2024'

6. Even though the same issue having been der: ded by alarge number of High Courts, we are still confronted witt large filing of identical matters on daity basis ranging between 5 to 10 writ petitions. That upon the instructions being sorrght from the Department, they have been taking a solitary g'ound that the decision of the Bombay High Court in the case of Hexaware Technologies LfiI, (2 supra) as also the one uhich has been decided by this--Cgrrt in the case of Kanakala Ravindra Redl! 82024 SCC OnLine Guj 4012 '2025 SCC OnLine Jhar 287 12023 : RI-JD : 4984- DB l 5 (l supra) has been subjected to chanenge 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 aising out of the same issue being decided by various High Courts.

7. To a query being put to the leamed counsel for tle Revenue, they have categorically accepted the fact that tbere 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 ar€ 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 itself.

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 havitrg been taken by the Income Tax Department to take appropriate steps to either hold back issuance of notice under Section l4gA and under Section 148 of the Act by the jurisdictional Assessing Oflicer, rather the authorities concerned in the teeth of series of decisions S!tsa:ffile-- :.rl I by ali , the map,: L.I''tglr Couits in trndia are continuously ;'ili initiating proceedings under Section l48A of the Act and also initiating proceedings under Section 148 of the Act in contravention to the amendments brought into the Ir come Tax Act pursuant to the Finance Act,2O2O as also the Financt: Act202l' g. Upon a query being put as to why can't 1ll5 rurit petition be disposed of in the teeth of the decision rendered b the case of Kanakala Ravindra Redtly (l supra), lerrned Standing " this Court in Counsel for the Income Tax Department contends tt at those would unnecessarily burden the Income Tax Departme it where they would be required to file equat number of SI Ps before the Itron'ble Supreme Court and it would be further burdening the exchequer of the Union of tndia. [t was also the c( ntention of the learned Standing Counsel that no prejudice would Le caused to the interest of the petitioners in case ilthis writ petition is kept pending till the finalization of the SLPs pending belor: the Hon'ble Supreme court and the fact that the petitioner is zr ready enjoying the benefit of interim protection. Nonetheless, on tie earlier query of this Court as to why the Income Tax Departmenl have not come out with a mechanism to issue apprcpriate instruc ions or to take 7 appropnate steps in ensuring that prooeedings under Section,,il4gA ofthe Act as also the assessment orders under Section l4g ofthe Act are kept in a hold in the light of the decisions dedcided by the various High Courts, it was submitted 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 rhese 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 High Court allowing writ petitions on the very same issue. The Income Tax authorities concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section I 5 I A 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 Kanakala Ravindra Reddy (1 supra). What is also surprising is the fact that g16,,gh while allowing the writ petitions in the case of Kanakala Ravindra Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners r. j. j r r!::5iffi @e&>:3$. E insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Finance A'ct' 2020 and the Finance Act,202l.The petitioner assessee woull be entitled to challenge or raise the other legal objections if the Revenue 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 sticking on to the stand' which this High Court as well as many other High Courts alre ady held to be bad. It appears that because of the aforesaid liber''" that this High 1 l. Court had granted permitting the Revenue for nitiating fresh proceedings as a one-time measure in a faceles s manner' the Income Tax Department wants to take advantage rl the same by protracting these proceedings which would enable lllem to meet the limitation that would otherwise come in the way. -ikewise, if the writ petition is kept pending for a considerable [on1l period of time and finally at a later stage if the Hon'ble Suprem<: Court confirms the decision taken by this High Court as atso b1z the other High Courts in which the SLPs are stitl pending' tlre Income Tax 9 Department would get the advantage of the liberfy that is otherwise protected in favour of the Revenue for initiation of fiesh 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 @ncemed. As a consequence, the Income Tax D€parfinent 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 set in Kanahala Ravindra Reddy (l supra), is a matter of grave concem. The Income Tax Department,s persistent initiation of fresh proceedings, disregarding the established judicial pronoun@ments, has led to an unprecedented surge in litigation with over 600-700 petitions piling up on the same issue. This deliberate approach not only undermines 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 ro initiate fresh proceedings appeam to be a calculated move to buy time and circumvent limitation periods, rather than adhering to the established legal \. 10 position. Such conduct raises serious questior s about the administrative eff,ciency and the respect for judicial pronouncements, particularly when this Court has aheady provided a balanced approach by preserving both the Revenrre'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 thrt proceedings under Sections 148-A and 148 should not have bten issued in a faceless manner, at least till the Hon'ble Supreme (]ourt decide the twelve hundred (1200) odd SLPs which it is alreadv seized ofor' at least the Income Tax Department should have firund out some remedial steps to ensure that wherever the authrl"ities intend to initiate proceedings under Sections 148-4 and 148' other than in a laceless manner, the proceedings shoutd have been deferred without precipitating the matter further intimating t re assessee that they shall initiate appropriate proceedings only aftr'r the SLP's are decided by the Hon'ble Supreme Court on the v jry same issue' This again, the Income Tax Department, has not berrn able to give a convincing reply, except for the fact that such a cecision if at all 7t has 0o be taken, has to be taken for the whole of India, and which otherwise has to be by way of a policy decision and that too at the level 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 the one hand when ttre 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 of new writ petitions which in the long run not only affects 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,ble 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 Depalhent. yet, the authorities concemed at the State level itre 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 lyorse, the Income Tax Department is showing audacity by iszuing notices continuousry under Sections l4g-A and

1.2 148 through the jurisdictionai Assessing Officer wlereas it ought to have been only in the faceless manner.

14. [n the case of BANK OF INDIA vs' ASSISTANT COMMISSIONER, INCOME TAXrr, on an issue whether it was justifrable on the part of the Income Tax DepiLrtment in not following an order passed by the adjudicating autho'ity only on the ground that the appeals are pending, the Divisior Bench of the High Court of Bombay held at paragraph No.25 as under, viz'' : lvlr. Paridwalla has rightly drawn out atter tion to the '25. decision of this Court in Commissioner of lncome Tax vs' Smt' Godavaridevi Sarafr2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) ttd' v' lTO13 of which one of us (Justice G.S. Kulkarni) was a meml:er, wherein the CJU( categorically observed that the Revenue having not 'accepted" the iudgment of the High Court would not rlean that till the same is sel 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 Corporatiorr Ltd'14' the Court observed that the approach of the officials of Revenue of treatrng decisions being "not acceptable" was criticized by the Supreme Court. ln such decision' following are he relevant observations made by the Supreme Court. ' ' 11zozs; 170 taxmann.com 422 (Bombay)l '2 1t9781 113 ITR 589 (Bombay) " 1202+1 165 taxmann.com 581/300 Taxmat452 (Bornbay) 't t t9tl2l taxmann.com l6155 ELT 433 (SC) 13 o. sfl Reddy is perhaps flght in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuin€ly felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. Brtr what Sri Reddy overlooks is that we are not concemed 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 corrclusion, bypassed two appellate orders in regard to the same issue which were placed before them, one of the Oollector (Appeals) and the other of the Tribunal. The High Court has, in our view, righ y criticized this mnduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect &o the orders of authorities higher to them in the appellate hierarchy. lt cannot tre too vehemenfly emphasized that it is of utmost irnportance that, in disposing of the quasijudicial issues before them, r€venue officers are bound by the decisions of the appellate authorities. The order of the Appellte Collector 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 judsdiction of the Tribunal. The principtes of judicial discipline require that the orders of the higher appellate authorities should be foflowed unreservedty 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 subj€ct matter of an appeal can furnish no groufld for rnt following it unbss its operation has been suspended by afompe{€nt court. lf this healthy il,a 14 rule is not followed, the result will only be urldue harassment to assesses and chaos in administration of tax laws

12. We have dealt with this aspect at some length' the leirmed because it has been suggested bY Additional Solicitor General that the observ€.tions made by the High Court, have been harsh oll the officers. lt is clear that the observations of the High court, seemingly vehement, and appa€ntly unpalatable to the Revenue, are only intended tc curb a tendency in revenue matters which' if allow-'d to become widespread, could result in considerable harassment to the assesses-public without any t enefit to the Revenue We would like to say thtrt the depa(ment 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 adiudicating authorities ard the appellate authorities to the requirements of iJdicial discipline and the need for giving effect to the crders of the higher appellate authorities which are t'inding on them."

15. What is worrying this Bench more is ttie fact that an endeavour is being made whole heartedly to ensuft' 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 beinl; violative of the 15 Finance Act,?120 and Finance Act,2021, Now, in order to protoct the interest ofthe Revenue as also that of the assessee, it would be trite at this juncture, if we dispose of tb€ 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 ooverd by the decision of this Court and which stands fortified by the decisions of the various other I{igh 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.

17. So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs L6 36,37 and,38 ofthe order which, for ready reference, is reproduced hereunder:

36. For all the aforesaid reasons, the impugne'd notices issued and the proceedings drawn by the relipondent- Department is neither tenable, nor su;tainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are acconlingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential ordel s passed by the respondent-Department pursuanl to th3 notices issued under Section '147 and 148 would itlso get quashed and it is ordered accordingly. The ft|ason we are quashing the consequential order is on the trinciples that when the initiation of the proceedings i:self was procedurally wrong, the subsequent orders irlso gets nullified automatically.

37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands al owed on this very jurisdictional issue. Since the impugned notices and orders are gefting quashed on the point of jurisdiction, we are not inclined to proceed fulher and decide the other issues raised by the petitiorer which stands reserved to be raised and contend<rd 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 substituted provisions, and this Court allowing the petitions only on the procedural flaw, :he right t7 conferred on the FtevenLte 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.

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, \ L preferred by the Income Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of th€ aforesaid SLP preferred by the Revenue against the decision ofthis High Court in the case of Kanakala Ravindra Reddy (l stryra) { 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 srme issue.

19. Accordingly, the instant writ petition stands allowed favour of the assessee so far as the issue of jurisdiction ls concemed. As a consequence, the impugned notice under challenge under Sections 148-4 and /FE rtqo$ set aside/quashed. 1t The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this High Cour in the case of Kankanala Ravindra Reddy (l supra). There shall re no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY// SD/- B. REKHA RAN] ASS,ISTANT REGISTRAR -/| G2- SECTION OFFICER To

1. The lncome Tax Officer Ward '1 , Adilabad/Adilabad. Hyderabad, Telangana.

2. The Principal Chief Commissioner of lncome Tax Telangana and A.P., Hyderabad, lT Towers, AC Guards, Masab Tank, llyderabad - 500028, Telangana.

3. The Central Board of Direct Taxes, Represented b,r its Chairman, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 1 10 001 .

4. The National Faceless Assessment Center, lncomo Tax Department, New \ Delhi.

5. The Secretary to the Government, Union of lndia, [)epartment of Revenue, Ministry of Finance, New Delhi - 1 10 001 .

6. One CC to SRI THANNERU CHAITANYA KUMAR Advocate [OPUC] 7. One CC to IVts. J.SUNITHA (JUNIOR SC FOR INCOME TAX) Advocate loPUcl

8. One CC to SRI B.MUKHERJEE, LEARNED COUNSEL REPRESENTING THE UNION OF lNDIA, Advocate (OPUC)

9. Two CD Copies SA-'g9 ,/. J J 't I ?,* t rIT .)t- | 03 ?025 ';i .: 'j.. HIGH COURT DATED:2810412025 ORDER WP.No.34331 ot 2024 r I ALLOWING THE W.P WITHOUT COSTS. r'[ a.