NITIN ENTERPRISES vs. Income-tax Officer Ward

This is a writ petition where t e proceedings are either challenged to the notices which were i sued under Section l48A and 148 of the lncomc Tax Act, 1961 fbr short 'the Act') or the assessment orders those have bcen pa sed under Section 147 ol the Act which have been assailed

This writ petition is being taken p today only on one of the grounds, that the notices issued unde Section 148A of the Act and the subsequent initiation of proce ings under Section 148 of the Act by the jurisdictional Assessi Oflficer, whereas in terms of the amendtner[t$t was brought to e Income Tax Act bY waY

Even though the same issue having been decided by a lalge number of I{igh Courts, we are still confronted with large fiting of identical matters on daity basis ranging betrvectt 5 to 10 ll,'rit petitions. 'Ihat upon the instructions being sought fron'r the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case of Hexaware Technologies Lrd., (2 supra) as also the one ulrich has been decided by this Courl in the case of Kanakala Ravindra Reddy- t2024 SCC Online Guj 4012 '2025 SCC Online Jhar 287 to pzo23 . RJ-JD:4984-DBl

Upon a qLrery being put as to rvhy can't this writ petition be disposed o1- in thc teeth of tl.re decision rendered br this Court in the case of Konakokr Rovindra Reddy (l supra), learned Standing Counsel lor the Incorne Tax Department contencls that those rvor"rld unnecessaril1, burden the Income Tax Departn-rent where tliey would be rcquired to filc equal number of SLPs belore the IJon'ble Suprerne Courl and it would be further. burdeninq the exchequer of l-he (Jnion ol India. lt was also the contention ol the leamed Standing Counsel that no prejudice would be caused to the interest of the petitioners in case if this writ petition is kept pcnding till the finalization of thc SLPs pending before the Hon'ble Supreme Court and the fact that the petitioner is already enloying the benefit of intelim protection. Nonetl.reless, on the earlier query of this Court as to why the Income Tax Depaftment have not colne out with a mechanisln to issue appropriate instructions or to take

As a result of which, what we litigation day in and day out even tho passcd by this High Court allou,ing issue. The lncome Tax authorities co 2025 also initiating proceedings in c ol- Section i 51A of the Act and as a to 700 petitions have been already Court on an issue which otherwise s judgment of this Court in the case ( 1 supra). What is also surprising allowing the writ petitions in the Redd.y (1 supra), the Division Benc the Revenue, has also protected r t interest of the petitioners eedings under Section 148A ers under Section 148 of the he decisions dedcided by the by the learned Standing taken at the level of CBDT en Pan India and cannot be igh Coults facing is steep increase of gh various orders have been it petitions on the very same cerned are still even now in ntravention to thc provisions sult by now, more than 600 ot piled up before this High ds squarely covered by the Kanukula Ravindra Reddv s the fact that though while ase of Kanakala Rwindra while reserving the right of 8 insofar as the libefty which was granted to the Ilevenue for initiating f.esh proceedings strictly in accordance rvith the amended provisions ol the Act, as arnended by the Finance Act, 2020 and the Financc A,ct, 2021. The petitioner assessee woulcl bc entitled to challenge or raise the other legal objections if the Revenue initiates fresh proceedings. The Depar-trncnt has made no endeavour. in availing the said liberty that rvas rescrved for thc Rcvenue. On the contrary, thcy have been still sticking on to the stand, which rliis High Court as well as many other.High Courls ah.eady l.reld to be bad. I l. [t appears that because ol the aloresaid libertl, rhar this High Court had granted permitting the Revenue for initiating fresh proceedings as a one-time lleasurc in a faceless rnanner. the Incorne Tax Deparhent wants to take advantage ol- thc same by protracting these proceedings which would enable thern to rneet the limitation that would otherwise corne in the way. Likewise, if the writ petition is kept pending lbr. a considerable long pcriod of tirne and finally at a later stage if the Hon,ble Supreme Court confirms the decision taken by this High Courr as also by thc other High Courts in which the SLPs are still pending,, the Income Tax

Another aspect which needs to be consideted is that in fact it should havc been realized by the Income Tax Departmer-rt itself and should have found out via media in ensuring that proceedings under Sections 148-,{ ancl 14g should not have been issued in a faceless manner, at least till the Hon,ble Supreme Court decide the twelve hundred (1200) odd SLps whicfi it is already seized ofor, ar least the Income Tax Department should have lbund out some remedial steps to ensure that wherever the authorities intend to initiate proceedings ur.rder Sections r4g-A and 14g, other than in a faceless manner, the proceedings should have been defer.red without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after l.he SLp,s are decided by the Hon'ble Supreme Court on the ve1.y same issue. This again, the Income Tax Deparlment, 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 fol th otherwise has to be bY waY of a Polic level ol Central Board of Direct T Standing Counsel for the lncome Tax the Dethi l{igh Court dismissed a writ the one hand when the Fligh Court pendency, such notices which aro u petition are lorcing the assessee to k Courl resulting in tiling of hundreds o the long run not only affects the dis also consumes substantial time of matters again and again on daily basi rnatter before the Hon'ble Suprctnc many occasions, the Hon'ble SuPrem rnatter has been reluctant in granting Incomc Tax Dcpartment. Yet, tlle State level are not ready to accept th of High Courls of different States on things turther worse, the Income audacity by issuing notices continuou ly under Sections 148-A and whole of India, and which decision and that too at the es. Though the leamed Department contended that etition of similar nature, on is struggling to reduce its der challenge ln this writ ock the doors of this High new writ petitions which in sal of the writ petitions but e .Bench in hearing these Admittedly, in spite of the ourt having been taken on Court which is seized of the y interim protection to the uthorities concerned at the verdict passed by a majoritY the same issue; and to make justifiable on the part o1' the Incorne Tax I)epartrnent in not following an order passed by the adjudicating authority only on the ground thal tl.re appeals arc pending, the Division Bcnch ol the Fligh Court of Bombay held ar paragr.aph No.25 as under, viz., : '25. "accepted" the judgment of the High Court woutd not mean that till treating decisions betng,,not acceptable', was crrticized by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court. ',t I{ZOZS) 170 taxmann.corn 422 (Bombay)l " 119181 I t 3 ITR 589 (Bombav) '3 TZOZ+1165 raxmann.com 5gl/300 Taxman 452 (Bornbai.) 'o 1t9921raxmann.com t6/55 EL-l' 433 (SC)

Sri Reddy is perhaPs righ officers were not actuated b passing the impugned orde genuinely felt that the claim of tenable and that, if it was a would suffer. But what Sri Redd are not concerned here with otherwise of their concluston malafides but with the fact that t in their conclusion, by-passed regard to the same issue whi them, one of the Collector (APP the Tribunal. The High Court h criticized this conduct of the A the harassment to the assesse of these officers to give eff authorities higher to them tn the cannot be too vehemently em utmost importance that, r quasijudlcial issues before the bound by the decisions of th The order of the Appellte Coll Assistant Collectors working wi the order of the Tribunal is bin Collectors and the Appellate under the lurisdiction of the Tri judicial discipline require that t appellate authorities should be by the subordinate authorities. order of the appellate authorit the department - in itself an and is the subject matter of a ground for not following it u been suspended by a comPe g t court. lf this healthy in saying that the any mala fides in . They perhaps e assessee was not pted, the Revenue overlooks is that we the correctness or or of any factual e officers, in reaching appellate orders in were placed before als) and the other of s, in our view, rightly istant Collectors and caused by the failure ct to the orders of ppellate hierarchy. lt has.ized that it is of disposing of the , revenue officers are appellate authorities. ctor is binding on the in his .lurisdiction and ng upon the Assistant ollectors who function nal The princrples of e orders of the higher followed unreservedly The mere fact that the is not "acceptable'' to bjectionable phrase - appeal can furnish no less its operation has -1.4 rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws.

We have dealt with this aspect at some length, because it has been suggested by the learned 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 which. 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 should be paid by the adjudicating authorities and the appellate authorities to the requirements of judlcial discipline and the need for giving effect to the orders of the higher appellate authorities which are brnding on them." I 5. What is worrying this Bench more is thc fact that an endeavour is being made whole heartedly to ensure not to generatc further litigation on issues which have been laid to rest by a laree number of High courts all of whorn have taken a consistent stand that the action of the Income Tax Department being violative of the (

In the given facts and circ considered opinion that unless and of matters which are squarcly cover and which stands fortified by the High Courts on the very same iss Court would further be burdened rv and disposed of as a covercd matter. ll . So far as the interest of the R the considered opinion that the inte been considered and protected, as h f been observed in paragraphs 021 . Now, in order to protect of the assessee, it would be of the writ petition with an of the inst_ant writ petition in is High Court in the case of ) shall however be subject to re filed by thc Income Tax sideration before the Hon'ble stances, this Bench is of the ntil we do not timely dispose by thc decision of this Court ecisions of the various other , the pendency of this High ich otherwise can be decided venue is concemed, we ale of st olthe Revenue has already

Since the Hon'ble Supreme Court had, in the case of Ashish Agaruval, supra, as a one{ime 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, the right

We would only further like to we are inclined to dispose of the ins the fact that the earlier order of thi I(anakala Ravindrs Reddy (l sup before the Hon'ble Supreme Court preferred by the Income Tax Depart allowing of the instant writ petition aforesaid SLP preferred by the Reven High Court in the case of Kanaksla This, in other words, would mean tha so want, may move an appropriate pe writ petition in the light of the decis Courl in the pending SLP on the very

Accordingly, the instant writ fbvour of the assessee so far as concemed. As .a consequence, challenge under Sections 148-A and 48 stands set aside/quashed. ld remain reserved to from the stage of the in the case of Ashish ake observations that since t writ petition, conscious of High Court in the case of is subjected to challenge in SLP No.3574 of 2024, ent, we make it clear that s sub.ject to outcome oi the e against the decision of thrs Ravindra Reddy (1 stpra). either of the parties, if they ition seeking revival of this on of the Hon'ble Supreme ame lssue. petition stands allowed in E ISSUE of jurisdiction IS impugned notice under ', e

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