SRl. A v. A. SIVA KARTIKEYA

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 issue a Writ of Mandamu,s or any other appropriate Writ' Order or Directiofl, decraring that a. the order passed by the 1st Respondent, uls 147 rlw Sec. 1448 of the lncome Tax Act' 1961 ' dated 27 tO3t2O23 ' bearing DIN and for the Assessment Year Notice No. ITBA/AST/S/147t2O22-2g11O51412068(1)' 2015 - 16, and b. consequential penalty orders passed by the 1st Respondent' levying penalties u/s 271F of the lncome Tax Act' 1961' dated 2410712023' bearing DrN. rrBA/pNLtFr271 Ft2O23-24 1054553649{1), respectivery' for the Assessment Year 201 5 - '16' as arbitrary' illegal' bad in law' void-ab-initio' violatrve of the principles of natural !ustice' apart from being violative of Articles t 4, t 9(t )(g) and 265 of the constitution of lndia and sec 14gA c,f the lncome Tax Act. 1961, and to consequenfly set aside the same in the interests ofjustice lA NO: 1 OF 2024 Petition under Section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to stay all further proceedings -eruding any recovery, pursuant u/s 14g of the Act, dated 3110312022. lssued by the 2nd Respondent, vide DIN and Notice. lrBA/AST/s/148 1/2021-22t1042362063(i), for the Assessment year 2o1s - 16, pending disposal of the above Writ petition Counsel for the Petitioner: SRl. A. V. A. SIVA KARTIKEYA counsel for the Respondents: Ms. J. suNlrHA (JUNloR sc FoR lNcoME TAx) The Court made the following: ORDER TTIE IIONOURABLE SRI JUSTICE P'SAMKOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITIO N No.366s00F 2024 ORDER, (per Hon'ble Si Jtutice Narsing Rao Nailikonda) Heard Mr. A'V'A'Siva Kartikeya' leamed counsel for the petitioner and Ms. J'Sunitha, learned Junior Standing Counsel for the Income Tax Department for the respondents' Perused the record.

2.Thisisawritpetitionwheretheproceedingsareeither chattenged to the notices which were issued under Section l48A andl48oftheIncomeTaxAct,lg6l(forshort.theAct')orthe assessmentordersthosehavebeenpassedunderSectionl4Tof 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 ofproceedings under Section 148 of the Act by the jurisdictionai Assessing Officer' whereas in terms of the amendrnent{hat was brought to the Income Tax Act by way of Finance Act, 2O2l w'e'f', 01'M'2021 onwards' proceedings 2 under Section 1484. ofthe Act as also under Section l4ti ofthe Act ought to have also been issued and proceeded jn a i.aceless manner.

4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Act,202l i.e., the impugned notices under Section l48A and Section l4g ofthe Act not being issued in a faceless manner, have already been de:alt with and decided by this Courr in the case of KANKAT{ALA RAVINDRA REDDY vs. INCOME-TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions were allovi,ed and the proceedings initiated under Section r4gA as also under section 148 of the Act were held to be bad with consequential reliefi; on the ground of it being in violation of the provisions of Section l5lA of the Act read with Notification tBl2O22 dated29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number ol writ petitions which were allowed on similar I 1[(2023) 156 taxmann.com 178 (Telangana)] 3

5. Down the line' we find that tHe'same issrld'has' alsbi'been the Revenue bY various High Cours 1.e., decided against by the Bombay High Court in the case of IIT''XAWARE TECHNOLOGIES LTD'' vs' ASSISTANT COI\IMISSIONER OF INCOME TAX & OTIfERS2' Gauhati High Court in the case of RAM NARAYAN SAII 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 SRT VENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of internationar taxation, Bombay High court in the case of ABHTN ANILKUMAR SIIAII VS.INCOME TAX OFFICER, INTERNATIONAL TAXATIOIf which is again on international taxation and centrar circre, High court of Himachar case of GOVTND SINGH vs' INCOME TAX OFFICERi' Gujarat High Court in the case of MANSUKHBHAI pradesh in the '1zoz+1 464 ITR 430 (Bom) 'l(2024) 156 taxmann.com 47E (GauhaQl '[(2024) I 65 taxmann.com I l5 @unj ab &HarYana)l '12024) I 67 hxmann.com 4 1&(ftlangana)l "f2024) [66 taxmann.com 679 (BombaY)l ,12024) 165 taxma nn.com 1 13 (Himachal 4 DAHYABHAI,RADADIYA rc. INCOME TAx OFFICER, WARD 3(3)(tE, Jharkand High Court in rhe case or SIfyAM SUNDAR SAW vs. UMON OF INDIAe, Rajasthan Higf Court in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitiortsr0 which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Court in thr: case of GIRDHAR GOPAL DALMIA vs. UNION OF,INDIA. & ORS Gvr.A.T 1690 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 rihat the decision of the Bombay High court in the case of Ele,xaware Technologies Ltd, (2 supra) as also the one which hrLs been decided by this Court in rhe case of Kanakala Ravindra Reddy Ez0zq SCC Online Guj 40t2 '2025 SCC Online lhar 2g7 72023 : RI-JD :4984-DB l 5 (1 supra) has been subjocted to challenge in a Special l'eave Potition 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 arising out ofthe same issue being decided by various High Courts' for the Revenue'

7. To a query being put to the leamed couns€l they have categorically accepted the fact that there is no interim order granted by the Hon'ble Suprerne 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 flatter which otherwise has already been dealt and decided by this very High corirt 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, titl date, we do not find any remedial steps having been taken by the lncome Tax Department to take appropriate steps to either hold back issuance of notice under Section l48A and under Section 148 of the Act by the jurisdic'tional Assessing Officer' rather the authorities concemed in the teeth of series of decisions , i I ! I t I 6 - by all the major High courts in India are continrously still initiating proceedings under Section l4gA of the Act and also initiating proceedings under Section l4g ol_ tht: Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Act:2021. 9' upon a query being put as to why can't this wnt petition be disposed of in the teeth of the decision rendered by thir; Court in the case of Kanakala Ravindra Reddy (l supra), learned Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department wtrere they would be required to file equal number of SLI)s bcfore the Honrble Supreme Court and it would be further lturdening the exchequer of the Union of India. It was also the contention of the leamed Standing Counsel that no prejudice would be causrd to the interest ofthe 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 rhe petitioner is already enjoying the benefit of interim protection. Nonetheless, on the earlier query of this Court as to why the Income Ta.r Department have not come out with a mechanism to issue appropriate instructions or to take 7 appropriate steps in ensuring that proceedings under Section l48A of the Act as also the assessfilent orders under Section 148 of the Act are kept in a hold in the light of the decisions dodcided ty the various High Courts, it was submitted by the learned Standing Counsel that the said steps can only be taken at tlre 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 of litigation day in and day out even though various orders have been passed by this High Court altowing writ petitibns on the very same issue. The Income l'ax authorities concemed are still even now in ?-025 alsoinitiating proceedings in contravention to the provisions of Section 151A of the Act and as a result by now' more than 600 to 700 petitions have been already got piled up before this Hig[ 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 tlougfu 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 I ! I 1 I t I I F t{ o rDSi_r:ur - .a thr' rubei.qt -.vi_ii;L .,; .i.* 3ranted to the Rt:venue ior initiating fresh proceedings strictly in accordance with the amended provisions ofthe Act, as amended by the Finance Act,2020 arrd the Finance Act, ZOZ'. The petitioner assessee would be entitled to challenge or raise the other legal objections if the Revenue initiates fresh proceedings. The Department has made no endreavour in availing the said liberty that was reserved for the Revenue. on the contrary, they have been still sticking on to the stand, rvhich this High Court as well as many other High Courts already 6eld to be bad.

11. It appears that because ofthe aforesaid liberty that this High Court had granted pemritting the Revenue for initiatrng fresh proceedings as a one-time measure in a faceless manner, the Income Tax Deparhent wants to take advantage of the same by protracting these proceedings which wourd enabre 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 oonfirms the decision taken by this High Court as also by the other High Courts in which the SLps are still pending, the lncome Tax \ 9 Dpartment would get the advantage of the libe*y 11'u1 i5 sthewisQ 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 beneficiat to the Revenue and would be equally disadvantageous and detrimental so far as interest Income Tax of the assesses are concemed' As a consequence' th€ 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 concem' The Income Tax Department's persistent initiation of fresh proceedings, disregarding the established judicial 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 principte of judicial precedent but also strains the judicial resources unnecessarily' The Deparhaent's strategy of awaiting the Supreme Court's decision on pending SLPs while continuing to initiate fresh proceedings appearc to be a calculated move to buy time and circumvent limitation periods, rather than adhering to the established legal i I I ! i i I i I 10 position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncements, particularly when this Court has alread y provided a balanced approach by preserving both the Revenue,s rights and assesses interests. 13' Another aspect which needs to be considered is th.t in fact it should have been realized by the Income Tax Department itself and should have found out via media in ensuring that pr.oceedings under Sections 148-4 and l4g should not have been issued in a faceless manner, at least till the Hon'ble Supreme Court ,lecide the twelve hundred (1200) odd SLps which it is already seized ofor, ar least the Income Tax Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections l4g-A and l4g, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter further intimating the asst:ssee that they shall initiate appropriate proceedings only after rhe SLp,s are decided by the Hon'ble Supreme Court on the very sarne issue. This again, the Income Tax Department, has not been able to give a convincing reply, except for the fact that such a dec,ision if at alt 11 has to be taken, has to be taken for the whole of lndia' and which othenvise has to be by way of a poricy 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 ttris 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' Admittedty' 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 Department' Yet' the authorities concemed at the State level arc not ready to accept the verdict passed by a majoriry 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-.{ and I i I 12 f 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.

14. In the case of BAITIK OF, INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXu, on an issue wherher it was justifiable on the part of the lncome Tax Department in not following an order passed by the a_djudicating authority ouly on the ground that the appeals are pending, the Division Benr:h of the High Court of Bombay held at paragraph No.25 as under, r7i2., . "25. Mr. paridwalla has dghfly drawn out attention to the decision of this Court in Commissioner of lncome Tax vs. $mt. Godavaridevi Sarafl2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (p) Ltd. v. l.J.O,3 of which one of us (Justice G.s. Kurkami) was a member., whe.ein the court categoricary observed that the Revenue having not "accepted" the iudgment of the High Court would not mean that till lhe same ,s set aside in a manner known to law, it would loose its binding force. Refening to the decision of the Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.ra, l:he court observed that the approach of the officiars of Revenue of treating decisions being .not acceptable" was criticizecl by the Supreme Cou(. ln such decision, following are the relevant observations made by the Supreme Court. jl ltlqf,, lr"o.gmann.com 422 (Bombay)l '- t Ie78l I t3 ITR 589 (Bombay) '' 120241 165 taxmann.com 5gl/300 Taxman 452 (Bombay) 'o lleg2l raxmann.com I6155 ELT 433 (SC) ..1 i t3 "6. Sri Reddy is perhaps right in saying that the o*""o n"r" not actuated by any mala fides in passing the impugned orders They perhaps lenuinety felt that the claim of the assessee w€s not Lnaote anO that, if it was accepted' the Revenue would suffer. But what Sri Reddy onerlooks is that we are not concemed here with the correctness or otn.*i.. of their conclusion or of any factual malafrdes but with the fact that the officers' in reaching in their conclusion, by-passed hl'o appellate orders in regard to the same issue which were placed before *l*, on" 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 to the assessee caused by the failure the harassm€nt of these offrcers to give effect to the orders of authorities higher to them in the appellate hierarchy lt cannot be too vehemently ernphasized that it is of utmost importance that' in disposing o{ the quasijr.dichl issues before them' revenue officers are iounO uy the decis'rons of the appellate authorities' The order of the Appellte Collector is binding on the Assistant Collectors working within his iurisdlction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who lunction under the lwisdiction of tle Tribunal' The principles of foiaa aiscptine require that the orders of the higher appettate authorit'res shoutd be followed unreservedly authorities' The mere fact that the iv tt orO", of the appellate' 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 unbss its operatlon has been suspended by a oompetent court' lf this healthy " "uoo'Oinate I I 1 I I I l i L I 14 I rule is not followed, the result will only be undut: harassment to assesses and chaos in adrninistration of tax laws.

12. We have dealt with this aspect at some length, because it has been suggested by the leamed Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. lt is clear that the observations of the High Court, seemingly vehement, and apparenfly unpalatable to the Revenue, are only intended to curb a tendency in revenue matters Mich, 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 these observations in the proper spirit. The observations of the High Court should be kept in mind in future and the utmost regard shoutd be paid by the adjudicating authorities and the appettate authorities to the requirements of judicial disciptine and the need for giving efiect to the orders of the higher appellate authorities which are binding on them."

15. What is worrying this Bench more is the fact r.hat 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 ofthe Income Tax Department being violative of the 15 I 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 flled 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 ofas a covered matter.

17. So far as the interest of the Rwenue 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 -t L6 a 36,37 and 38 ofthe order which, for ready referenr:e, is reproduced hereunder:

36. For all the aforesaid reasons, the impugned nolices issued and the proceedings drawn by the responden! Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted br:ing per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders geiting quashed, the consequential orders passed by the iespondent Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we ai'e quashing the consequential order is on the principles that when the initiation of the proceedings itself rivas proceduraily wrong, the subsequenl orders also gets nullified automatically.

37. The Dre:i!"ninary objection raised by the petitioner is s-stained srrd a:l these writ oetitions stands allowed on jurisdic,ironai ;ssue. Since the impugned notices this ver ),' and orCers are getting quashed on the point of .lurisdiction, we are not inclined to proceed fu(her and decide the other issues raised by the petitioner wtrich stands reserved tc oe raised and contended in an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in the cirse of Ashish Aganeral, supra, as a one-time measure exercisrng the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the pelitions only on the procedural flaw, the ri(lht L7 confened on the Revenue would reflain lfsenigC to if they so want from the stage of the proceed furth€r order of the Suprefile 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) iq 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 (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 ( I l 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 rs concerned. As a consequence, the iopugned notice under challenge under Sections 148-4 and 148 stands set aside/quashed 1c f- The consequentiai orders, if an;', aiso stand set aside./qrrashed ir 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/. A.JAYASREE SISTTANT REGISTRAR \/ .1ts=crror'r oFFraER , 5 \l Assessment Unit, lncome Tax Department, NationVl e-Assessment Center, New Oetf,l, Room No. 401 , 2nd Fioor. E-Ramp, Jawaharlal Nehru Stadium, ,NewDelhi - 110 003. The lncome Tax Officer, Ward 1, Nirmal, lncome Tax Office Nirmal - 5O4 101. Telangana. The Frincipal Chief Commissioner of lncome Tax, Andhra Pradesh and Telangana, Hyderabad, Room No.922,gth Floor, B Block, l.T.Towers, 10-2- 3, AC Guards, Hyderabad - 500 004, Telangana. One CC to SRl. A. V. A. SIVA KARTIKEYA, Advocate [OPUC] One CC to Ms. J. SUNITHA (JUNIOR SC FOR INCOME TAX) [OPUC] Two CD Copies BM TKS \F. To,

4. 5. 6. : ; I i i I I HIGH COURT DATED:2810412025 ./i. :' //. \ f(. c^ 20 siP 2[m \ ,:)i..-.,-. \:;_..,;_:;, // .i .i'r/ ORDER WP.No.36650 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS (F h q ql l/1