High Court · 2025

PetitionunderArticle226oflheConstitutionoflndiaprayingthatinthe circumstances stated in the affidavit filed therewith' the High Court may be pleased to issue a wrlt, order or direction' more particularly one in the nature of Writ of lVlandamus, declaring the impugned notice dated' 28 '02'2024 for A'Y' 2017-18 passed u/s 148A(d) of the Act vide DIN No' ITBA/AST1F1149N2O23- 2411061635558(1) and the consequential notice u/s '148 daled 28 'O2'2O24 vide DIN No. ITBtuAST/S/148-112o23-24t1o61635705(1)' issued by the JAO(1't respondent) instead of FAO(3rd respondent)'as void' illegal' and contrary to the provisions of incometax Act and contrary to the Principles of Natural Justice' .* , -;:r--;*id].i o IAN :1 oF2 o24 petition under Se the afndavit rireo in J;J;::[ooc"|,.i::::r::, in rhe circumstances stated in rne High court may be preased to suspend the notice ,"n". "-^"^lc'{rjr::' *"ffi ,',',-jl,#;it*fi*#i,:::'"'::'i:a{:i:i:,:1,,:: Counsel for the petitioner: Counsel for the Respondent Nos. 1to4: Ms. J. SUNIHA counset ror rhe Respondenr,^ SRl. THANNERU CHAITANYA KUMAR (JUNtoR sc ..i"1'.::: "t FoR lNcoME TAx) ,*, ceEii{i?ttijrd,ff^R, MUKHERJEE REp ". The court made the forowing: .RDER clroR GENERAL oF IND,A ( d TTIE HONOURABLE SRI JUSTICE P'SAM KOSHY rIrE H'N,,RABLp#XXUE NARSING RAo PETITION No.34336 OF 2024 ORDER: (per Hon'ble Sri Justice Narsing Rao Nandikonda) Heard Mr' Thanneru ChaitanYa Kumar' leamed counsel for the petitioner, Ms' J'sunitha' learned Junior Standing Counsel for the Income Tax Department for respondent Nos'l to 4 and Mr.B.Mukherjee,leamedcounselrepresentingtheUnionoflndia 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 148A and 148 of the Income Tax Act' t96 t (for shofi '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, that the notices issued under Section l48A 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 ambndment that was brought to the lncome Tax Act by way 2 of Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings under Section l4gA of rhe Act as also under Section l4g 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 Financ e Act, 2021 i.e., the impugned notices under Section 14gA and Section l4g of the Act not being issued in a faceless manner, have already been dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME_TAX OFFICERT decided on 14-09.2023 whereby a batch of writ petitions were ailowed and the proceedings initiated under Section r4gA as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions ofsection i51A of the Act read with Notification lg/2022 dated,29.03.2022. The said judgment passed by this court has arso been subsequentry foltowed in a large number of writ petitions which were allowed on similar terms. 't(2023) 156 taxmann.com 178 (Telangana)l A 3 TECHNOLOGIES

5. Down the line' we frnd that the same issue has also been decided against the Revenue by various High Courts i'e'' by the Bombay High Court in the case of HEXAWARE LTD'' vs' ASSISTANT COMMISSIONER OF INCOME TAX & OTIIERS2' Gauhati 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 REDDY PATLOOI,A VS. DEPUTY OF'INCOME TAX5 where the issue was in respect of international taxation' Bombay High Court in the case of ABHIN ANTLKUMAR SHAH VS.INCOME TAX OFFICER, INTERNATIONAL TAXATION6 which is again on international taxation and central circle, High court of Himachar case of GOVIND SINGII vs' INCOME TAX OFFICEil' Gujarat High Court in the case of MANSUKIIBHAI SRI VENKATARAMANA COMNIISSIONER pradesh in the 2 t2o24l464 ITR 430 (Bom) ' ifiizil 1 56 taxmann.com 478 (Gauhati)l "if,oaO 165 taxmann'com 115 (Punjab & Haryana)l 'izozq l6fuatgnann.com 4l I (Telangana)l u irnra, 165 taxmann.com 679 (Bombay)l 'i;o;;; ioi *rnu*'to1n I l3 lHimachal Pradesh)l aa\ \.1 DAHYABHAT RADADIYA vs. INCOME TAx OFFICER, WARD 3(3Xr8, 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. INCOME TAX OFFICER & ANOTHER and batch of writ petitionsr0 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 DALMIA vs. UNION OF INDIA & ORS ( M.A.T I 690 of 2023).decided on 25.09.2024.

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 between 5 to l0 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 *z0z+ scc online Guj 4012 '2025 SCC Online Jhar 287 to12o23 : RJ-JD:4984-DBl / 5 (1r supra) has been subjected to challenge: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 hled arising out ofthe same issue being decided by various High Courts' 1. 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 nah,e are being piled up before this Bench on daily basis and the pendency is getting increased on matter which otherwtse has arready been deart and decided by this very High court itserf. 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 148A and under Section 148 of the Act by the jurisdictional Assessing Officer' rather the authorities concemed in the teeth of series of decisions .t 6 by all the maior High Courts in India are continuously still initiating proceedings under Section r4gA of the Act and also initiating proceedings under Section 14g of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020as also the Finance Act202l. 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 Kanaksla Rwiydm Reddy (l supra), leamed Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to fire equar 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 prejudiee would be caused to the interest of the petitioners in case if this writ petition is kept pending till the finalization of the SLps pending before the Hon,ble Supreme Court and the fact that the petitioner is already enjoying the benefit ofinterim protection. Nonetheless, on the eartier query of this Court as to why the Income Tax Department have not come out with a mechanism to issue appropriate instmctions or to take /.. 7 appropriate steps in ensuring that proceedings under Section l48A ofthe Act as also the assessment orders uoder Section 148 ofthe Act are kept in a hold in the light ofthe decisions dedcided by the various High Courts' it was submitted by the leamed 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 lndia and cannot be limited to any of these jurisdictional High Courts' 10. As a result of which'.what we are facing is steep increase of litigation day in and dlV out even though vanous passed by this High Court allowing writ petitions on the very same issue. The Income Tax authorities concerned are still even now in 2025 alsoinitiating proceedings in contravention to the provisions of Section 15lA 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 though while allowing the writ petitions in the case of Kanakala Ravindra RefuIy (l supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners orders have been \i 8 insofar as the liberty which was granted to the Revenue for initiating fiesh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Financ e Act, 2020 and, the Finance Act, 2021. The petitioner assessee would be enfitled to challenge or raise the other regar 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 already held to be bad.

11. It appears that because ofthe aforesaid liberty that this High Court had granted 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 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 Courr confirms the decision taken by this High Court as also bv the other High Courts in which the SLPs are sti1l pending' the lncome Tax ! 1 9 Department would get the advantage of the liberty that is otherwtse 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 the Income Tax of the assesses are concemed' As a consequence' 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 set iL Kanakala Ravind'ra Refuly (l supra)' is a matter of grave concem' 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 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 to initiate fresh proceedings appears to be a calculated move to buy time and circumvent limitation periods, rather than adhering to the established legal 10 administrati ve efficiency and the position. Such conduct raises serious questions about 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 Income Tax Department itself and should have found out via media in ensuring that proceedings under Sections l4g_A and l4g 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 Ieast the Income Tax Department should have fbund out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 14g_A and l4g,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 Income Tax Department, has not been able to give a convincing reply, except for the fact that such a decision if at all ^ 11 has to 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 leamed 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 the 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 frling 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 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 dift'erent States on the same issue; and to make things further worse' the Income Tax Department is showing audacity by issuing notices continuously under Sections 148-4' and 12 148 through the jurisdictionar Assessing officer whereas rt ought \ to have been only in rhe faceless manner. 14. In rhe case of BANK OF INDIA vs ASSISTANT COMMISSIONER, INCOME TAXil, on an issue whether it was justifiable on the part of the Income Tax Department in not following an order passed by the adjudicating authonty only on the grounC that the appeals are pending, the Divisicn Bench of the Fiigh court of Bcrnbay held at paragraph No.25 as under, viz., : "25. tvtr. paridwalla has righ y drawn out attention to the tiecision of thrs Couit in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafl2 as also the recent decision of the co_ . ordinate Bench of this Court in Samp Furniture (p) t.td. v. lfgr3 of which one of us (Justice G.s. Kurkarni) 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 kncwn to law, it would loose its binding force. Referring to the deoision of ttte Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.r4, the court observed that the approach of the officiars of Revenue of treating decisicns being ,,not acceptable,, was criticized by the Supreme Cou(. ln such decision, following are the relevant observations made by the Supreme Court. " [(z0zs) I70 taxmann.com 422 (Bombay)] '' tl978l I l3 ITR 589 (Bombay) ',t, IZOZ+1 1 65 taxmann. com 5 8 I /3 00 T axman 4 52 (Bombay) t4 ltsgzltaxmann.com l6155 ELT 433 (SC) / 13 "nv tr"turr "o'ectors .6. sri Reddy is perhaps risht in savins t::: .':" ;H;";; not actuated.t,"*' ;:; ffi,ol passins the impugned :T;;" assessee was not genuinely felt that the clail ,"""pt"0, the Revenue *;:;';:':::ilJi -; tenable and that' if it was ;:; ;"; But what "': are not concerned *'", or- of ;; othe*ise of their Tni'l,t tn" officers' in reaching malafides but with the ""ltl; *""10r",,r," orders in in their conclusion, by-passe- '* w"r" pta""o uetore resard to the same :"::-:^;;"";; and tne other or them, one of the collector H;;, ;;r.. view, rishfly the rribunal rhe Hish ll";"';"; criticized this conduct of th the harassment to the assessee caused by the failure of these officels 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 ,rr,r*Ont issues before them' revenue 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 iurisdiction the order of the Tribunal is binding upon the Assistant Coliectors and the Appellate Collectors who function- of the Tribunal The principles of under the iurisdiction iudicial discipline require that the orders of the higher appettate authorities should be followed unreservedly by the subordinate authorities' The mere fact that the order of the appetlate authority is not "acceptable" to the department - in itself an obiectionable 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 rer harassment ," ,";; of tax laws. witt ontv be undue chaos in administration ;sult \ aspect at some length' by the rearned

12. We have dealt with because it has been .this Additionar Soricitor o"n. "nut'"d o, the High ""r;'irrt:1"ffr::TT''il: officers. lt is clear that th observations of the High court, seemingry ,"nre and apparenfly unparatabre ,o ,n" *"runr.''"nt' ' u'" on'' intended to curb a tendency in revenue ,, become widesp**, .",#"[Ji::' :":.il:r: harassment to the assesses to the Revenue. *" *"r'"'ol,,i"'',:"ff'In::',::' department should take these observations in the proper spirit. The observalions of the High Court should be kept in mind in futr shourd be paid by the "r,rr,::T;:l;J:[""::?il: appellate authorities to the requiremenls of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them."

15. What is woryring this Bench more is the fact that an endeavour is being made whole heartedly to ensure nor 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 Income Tax Department being violative of the ,l 15 Finance Lct,2o[Oand Finance Lcf'2021' 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 (r 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 by 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 of as a covered matter. 17 . 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 36,37 awj3g of the order which hereunder: for ready reference, is reproduced '';;;":

36. For all the aforesaid issued and *" ,.";:^"sons' Deparrment ," 'rro The notices ," lr.r"o per se iilegar, deserves ," ^:;;.:: tI .renabre, the impugned notices trawn bv the respondenr- nor sustainabte aoopted being :::"0r." and are accordinslv ser all the impugned aside/quashed. orders gening or""n;, ,;'j"^"^o-'"nce' j:'1;'*"";;;;";#::::1H::? ;T: ;",,# rssued under Section 14i quashed and it is ordere o 'rlno 'o'**ro arso get cordingly The reason we are quashing th" o"", is on the principles "onr"qr"nt' that when the initiation o, ,'"' ,'o"""o,ngs itserf was procedurafly wrong, the sequent orders also gets nullified automaticary. "ron"

37. The prelimjnary object ion 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 an d contended 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 1 42 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, the right I 17 conferred on the Revenue would remain reseNed to proceed further if they so want {rom the stage of the orO", of the Supreme Gourt in the case of Ashish Agarwal, supra

18. We would only further like to make observations that slnce 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 (1 supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No'3574 of 2024' preferred bY the Income Tax 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 of this High Court in the case of Kanakala Ravindra Reddy (1 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 tight of the decision of the Hon'ble Supreme Court in the pending SLP on the very same issue' \

19. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction is As a consequence, the impugned notice under 148-4 and 148 stands set aside/quashed' concemed challenge under Sections 18 The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this High Court in the case of Kankansra Ravindra Reddy (r supra). There shail be no order as to costs Consequently, miscellaneous petitions pending, if any, shall stand closed To, //TRUE COPYII i OSMAN ALI BAI G TANT REGISTRAR SECTION OFFICER t_ Hyderaba d Telan gana '1 . The income Tax Officer, Ward 1 , Adilabad/ Adilabad,H yderabad, Telangana 2. The Princi pal Chief Commissi oner of Income Tax, Telangana and A.p lT Towers. AC G uards, Masab Tank, Hyde rabad - 500028, 3. The Chairman, Central Board of Direct Taxes Department of Revenue, Mini stry of Finance Government of lndia Secretariat Buildings, New Delhi - 'I 10 001 4. The National Faceless Assessment Center, lncome Tax Department, New : ilH.?i%?tp,?;,Y#:1, :l' Btft ,':ll; go;e'n ment, Depa rrment or Reve n ue, ?il:JErs^;fl T,ttiFF,_!ilflrsJ+5Hyf"Hf rrit",rpJfi ,?, 8 one cc to sRr. cADr 'RAVEEN'xiiilA'd,"Di.'solrcrroR ceNencl or tNDtA [OPUCI T*o CD Copies B ,9 LS HIGH COURT DATED:28 tT4t2|2s ORDER WP.No.34336 of 2024 -/- =:'::'.-"1 ,.//Z\\11 f't t'. 5 .{ g. 1t iul 2W {i \' ALLOWING THE WRIT PETITION WITHOUT COSTS