Premnivas Attal vs. Assessment Unit, Income Tax Department
What did the High Court hold?
The High Court allowed the writ petition. The Court held that the impugned notices issued under Section 148A and Section 148 of the Income Tax Act, 1961, and the subsequent assessment proceedings under Section 147, were illegal and void ab initio for not adhering to the faceless assessment procedure mandated by the Finance Act, 2021. The Court relied heavily on its own prior decision in KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICER, which had quashed similar proceedings on grounds of procedural illegality and violation of Section 151A of the Act. The Court noted that numerous other High Courts had also taken a consistent stand on this issue. While acknowledging that the Revenue had filed Special Leave Petitions before the Supreme Court challenging these High Court decisions, the Court observed that no interim order had been granted by the Supreme Court. Consequently, the Court quashed the impugned notices and assessment orders, stating that the disposal of the writ petition was subject to the outcome of the pending SLPs before the Supreme Court. The Court also clarified that either party could seek revival of the writ petition in light of the Supreme Court's decision. The consequential orders were also set aside.
What were the facts?
The Petitioner, Premnivas Attal, filed a writ petition before the High Court of Telangana at Hyderabad challenging assessment orders and penalty notices issued under Sections 147, 144B, 148A, 148, 274 read with 272A(1)(d), 270A, and 271AAC(1) of the Income Tax Act, 1961, for Assessment Year 2019-20. The Petitioner contended that these notices and proceedings were illegal, arbitrary, and violative of the Constitution and the Income Tax Act, primarily because they were not conducted in a faceless manner as mandated by the Finance Act, 2021. The Petitioner sought a declaration that the proceedings were void ab initio and prayed for their setting aside. The Revenue, represented by the Income Tax Department, was the respondent.
What were the issues?
1. Whether the assessment proceedings initiated under Section 147 read with Section 144B and notices issued under Section 148A and Section 148 of the Income Tax Act, 1961, for Assessment Year 2019-20, are illegal and void ab initio for not being conducted in a faceless manner as per the Finance Act, 2021. Assessee's Contention: The Petitioner argued that the impugned notices and proceedings were in violation of the Finance Act, 2021, specifically that they were not issued in a faceless manner. The Petitioner relied on the High Court's own judgment in KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICER (2023) and subsequent judgments from various High Courts, including Bombay, Punjab & Haryana, Gujarat, Jharkhand, Rajasthan, and Calcutta, which have held similar proceedings to be bad due to procedural flaws and violation of Section 151A of the Act read with relevant notifications. Revenue's Contention: The Revenue's primary defense was that the Bombay High Court's decision in HEXAWARE TECHNOLOGIES LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS and the Telangana High Court's decision in KANKANALA RAVINDRA REDDY were under challenge before the Supreme Court via Special Leave Petitions. The Revenue indicated that there was no interim order granted by the Supreme Court in these matters.
Which sections of the Income-tax Act were involved?
Section 147,Section 144B,Section 148A,Section 148,Section 274,Section 272A(1)(d),Section 270A,Section 271AAC(1),Section 151A
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following: ORDER
of Finance Act, 2O2l w.e.f., 01'0 .2021 onwards, Proceedings THE HONOURABLE SRIJUS AND TTIE HONOURABLE SRI JUS QBDEB, (per Hon'ble Sri Justice P.Sam Heard Mr. TejPrakash Toshni ICE P.SAM KOSHY shY) ICE NARSING RAO NANDIKO A WRIT PETITION No. 4325 of2025 , leamed counsel for the petitioner and Ms. Bokaro SaPna y, leamed Junior Standing Counsel for the Income Tax DeP and 2. Perused the record. ent, for resPondent Nos. I
This is a writ Petition where the proceedings are either issued under Section 148A (for short 'the Act') or the challenged to the notices which wer and 148 of the Income Tax Act, 196 assessment orders those have been assed under Section 147 of the Act which have been assailed'
This writ Petition is being take up today onlY on one of the grounds, that the notices issued er Section l48A of the Act and the subsequent initiation of proc edings under Section 148 of the Act by the jurisdictional Assessi g Officer, whereas in terms the Income T@Ulct bY waY of the amendment that was brought
2 under Section 148,4. of the Act as also under Section 148 of the Act ought to have also been issued and proceeded in a faceless manner.
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 l48A and Section 148 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 allowed and the proceedings initiated under Section 148,4. as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation ofthe provisions of Section 15lA of the Act read with Notification 1812022 dated 29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allowed on similar telms. 'l(2023) 156 taxmann.com I78 (Telangana)l
3
Down the line, we find that th decided against the Revenue bY by the BombaY High Court in TECHNOLOGIES LTD.' vs' ASS OF INCOME TAX & OTHERS2, of RAM NARAYAN SAH vs' IINI ABHIN ANILKUMAR SIIAH vs' TNTERNATIONAL TAXATIO]t' taxation and central circle, High Co case of GOVIND SINGH vs' Gujarat High Court in the ' Tzoz+1464 ITR 430 (Bom) ' [(2024) 15S lalmann'som 478 " l(2024) 165 taxmann'com 1 I 5 '[2024) 167 taxmann.com 411 " 12024) 166 taxmann.com 679 ' 12024) I65 taxmann.com I I 3 (Gu (Bo same issue has also been arlous High Courts i.e., case of HEXAWARE e @unjab & 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 DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024
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 10 writ petitions. That upon the instructions being sought from the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case of Hernware Technologies Ltd., (2 supra) as also the one which has been decided by this Court in the case of Kanakala Ravindra Retldy '202+ SCC Ont.ine Guj 4012 '2025 SCC Online Jhar287 'o p2oz3, RI-JD :4984-DBl I ,
(1 supra) has been subjected to ch Petition i.e., SLP No.3574 of 2024 Court and the Hon'ble SuPreme Co In addition, there are about 1200 SLP same issue being decided by various
To a query being Put to the I they have categorically accepted the order granted bY the Hon'ble Su matters pending before it' Meanw identical nature are being piled up be and the pendencY is getting in has already been dealt and decided by 8. On the one hand, even thou was passed as earlY as on 14'09'20 lapsed, till date, we do not hnd taken by the [ncome Tax DePartme either hold back issuance of notice Section 148 of the Act bY the j rather the authorities concemed in . ffi1;". ... -. -=iL 5 lenge in a SPecial Leave fore the Hon'ble SuPreme is seized of the matter' also filed arising out of the gh Courts. ed counsel for the Revenue, fact that there is no intenm me Court in anY of these ile, fresh writ Petitions of ore this Bench on dailY basis on matter which otherwise this very High Court itself the order of this Court that 3 and more 16 months have remedial stePs having been t to take aPProPriate steps to Section 148,{ and under sdictional Assessing Offrcer, e teeth of series of decisions
6 by all the major High Courts in India are continuously still 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 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 writ petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakalo Ravindra Reddy (l supra), learned Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the lncome Tax Department where they would be required to file equal 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 prejudice 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 Courl and the fact that the petitioner is already enjoying the beneht 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 instructions or to take
7 appropriate steps in ensuring that of the Act as also the assessment o Act are kept in a hold in the light of t various High Courts, it was submi Counsel that the said steps can only as any such stePs would have to be timited to any of these jurisdictional t 0. As a result of which, what we litigation day in and day out even th passed bY this High Couft allowing issue. The Income Tax authorities c 2025 also initiating proceedings in c of Section 15 1A of the Act and as a to 700 petitions have been alreadY Court on an issue which otherwise judgment of this Court in the case (1 supra). What is also surPrising allowing the writ Petitions in the Reddy (l suPra); the Division Ben the Revenue, has also Protected edings under Section 148,{ rs under Section 148 ofthe e decisions dedcided bY the d by the leamed Standing taken at the level of CBDT en Pan India and cannot be gh Courts. facing is steep increase of ugh various orders have been it petitions on the very same ncemed are still even now ln ntravention to the Provisions
result by now, more than 600 ot piled uP before this High tands squarelY covered bY the f Kanakala Ravindra ReddY is the fact that though while case of Kanakala Ravindra h while reserving the right of e interest of the Petitioners
8 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 Financ e Act, 2020 and the Finance Act,202l. The petitioner assessee would be entitled to challenge or raise the other legal objections if the Rcvenue initiates fresh proceedings. The Department has made no endeavour in availing the said liberty that was reserved for the Revcnue. On the contrary, they have been still sticking on to the stand, which this High Court as well as rnany other High Courts already held to be bad. I 1. It appears that because of the aforesaid libertl, that this High Court had granted pennitting the Revenue for initiating fresh proceedings as a one-time measure in a faceless manner, the Income Tax Department wants to take advantage ol'the same by protracting these proceedings which would enable them to meet the limitation that rvould 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 C]ourt confirms the decision taken by this High Court as also by the other High Courts in which the SLps are still pending, the lncome Tax
I Department would get the advantage o protected in favour of the Reve proceedings from the disposal of these which would be advantageous and would be equally disadvantageous an of the assesses are concerned' As a Department gets an extended period proceedings.
The alarming trend of docket e the clear precedent set in Kanukala matter of grave concem. The lncom initiation of fresh proceedings, disre pronouncements, has led to an unP with over 600-700 petitions piling deliberate aPProach not onlY unde precedent but also strains the judici Department's strategy of awaiting th pending SLPs while continuing appears to be a calculated move limitation periods, rather than ad the liberty that is otherwise e for initiation of fresh matters at a much later stage eficial to the Revenue and detrimental so far as interest nsequence, the lncome Tax f time for initiation of fresh plosion in this Court, desPite avindra RedtlY (l suPra), is a Tax Departmenf s Persistent ing the established judicial cedented surge in litigation up on the same issue. This es the princiPle of judicial resources unnecessarilY. The Supreme Court's decision on initiate fresh Proceedings to buy time and circumvent ring to the established legal
10 position. Such conduct raises serious questions about the administrative efficiency and the respect lor judicial pronouncements, particularly when this Court has already provided a balanced approach by preserving both the Revenue's rights and assesses interests.
Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Depar.tment itself and should have found out via media in ensuring that proceedings under Sections 148-,,{ and 148 should not have bccn issued in a faceless maru1er, at least till the Hon'ble Supreme Court decide the twelve hundred (1200) odd SLPs which it is already seized olor, 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 alter 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 ( t .,tfl
lL has to be taken, has to be taken for otherwise has to be bY waY of a Polic level of Central Board of Direct Standing Counsel for the Income T the Delhi High Court dismissed a wri the one hand when the High Co pendency, such notices which are petition are forcing the assessee to Court resulting in filing of hundreds the long run not only affects the dis also consumes substantial time of matters again and again on daily bas matter before the Hon'ble SuPreme many occasions, the Hon'ble SuPre matter has been reluctant in grantin Income Tax DePartment. Yet, th State level are not readY to accePt of High Courts of different States things further worse, the Income audacity by issuing notices continu e whole of India, and which decision and that too at the axes. Though the leamed Depadment contended that petition of similar nature, on is struggling to reduce ils der challenge in this writ nock the doors of this High f new writ petitions which in sal of the writ Petitions but the Bench in hearing these Admittedly, in spite of the S Court having been taken on e Court which is seized of the any interim Protection to the authorities concemed at the e verdict passed bY a majoritY the same issue; and to make Tax DePartment is showing usly under Sections 148-A and High Court of Bornbay held at paragraph No.25 as under, viz., :
"
Godavaridevi Sarafl2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (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 treating decisions being "not acceptable" was criticized by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court. f It 11zozs1 170 taxmann.com 422 (Bombay)l '' 1tszs1 u3 ITR 589 (Bombay) ' 3 TZOZ+7 1 6 5 taxmann.com 5 8 I /3 00 T axman 4 52 (Bombal) to 1l9921taxmann.com- 16/55 ELT 433 (SC) '
13 "
Sri ReddY is PerhaPs right officers were not actuated bY 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 conclusion malafides but with the fact that in their conclusion, bY-Passed regard to the same issue whic them, one of the Collector ( the Tribunal. The High Court criticized this conduct of the A the harassment to the assess of these officers to give authorities higher to them in the cannot be too vehemently e utmost imPortance that' I quasijudicial issues before the bound bY the decisions of th The order of the APPellte Coll Assistant Collectors working the order of the Tribunal is bin Collectors and the APPellate under the .lurisdiction of the Tri judicial disciPline require that appellate authorities should by the subordinate authorities order of the aPPellate author the department - in itself an and is the subject matter of a ground for not following it u been susPlended bY a compe in saying that the any mala fides in They PerhaPs assessee was not pted, the Revenue overlooks is that we the correctness or or of anY factual officers, in reaching appellate orders in were placed before ls) and the other of s, in our view, rightly sistant Collectors and caused bY the failure to the orders of appellate hierarchY It phasized that it is of disposing of the , revenue officers are appellate authorities. or is binding on the hin his jurisdiction and ing upon the Assistant llectors who function unal. The PrinciPles of e orders of the higher followed unreservedlY The mere fact that the is not "acceptable" to objectionable Phrase - appeal can furnish no less its oPeration has nt court. lf this healthy i i :
7 -t4 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 apparently 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 judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them." 1 5. What is worying this Bench more is the fact that 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 of the Income Tax Department being violative of the (
i I 15 Finance Act,202O andFinance Act' 2 the interest of the Revenue as also trite at this juncture, if we dispose obserwation/direction that the disposal terms of the judgment rendered bY Kankanala Ravindra ReddY (1 *Pr the outcome of the SLPs which w Department and which is Pending co Supreme Court.
In the given facts and circ considered opinion that unless and of matters which are squarelY cove and which stands fortified bY the High Courts on the very same iss Court would further be burdened and disposed of as a covered matter'
So far as the interest ofthe the consideted opinion that the inte been considered and Protected, as 21 . Now, in order to Protect of the assessee, it would be f the writ Petition with an of the instant writ Petition in is High Court in the case of shall however be subject to e frled bY the Income Tax ideration before the Hon'ble stances, this Bench is of the til we do not timelY disPose by the decision of this Coutt ecisions of the various other e, the pendencY of this High ch otherwise can be decided enue is concemed,, we are of st of the Revenue has alreadY s been observed in ParagraPhs
7 16 36,37 and 38 ofthe order which, for ready reference, is reproduced hereun der:
For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent- Department rs neither tenable, nor 'sustainable. 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-Department 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.
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 pro€ed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings.
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, permifted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right .l ,. (
conferred on the Revenue proceed further if theY so wa order of the SuPreme Cou Agarwal, supra.
We would only further like we are inclined to dispose of the ins the fact that the earlier order of Kanakala Ravindra ReddY (l srtP before the Hon'ble SuPreme Co preferred by the lncome Tax De allowing of the instant writ petitio aforesaid SLP preferred by the Reve High Court in the case of Kanaka This, in other words, would mean so want, may move an aPProPriate writ petition in the light of the d Court in the pending SLP on the v
AccordinglY, the instant favour of the assessee so far concemed. As a consequence, challenge under Sections 148-,4' an 148 stands set aside/quashed. 77 uld remain reserved to t from the stage of the in the case of Ashish make observations that since t writ petition, conscious of s High Court in the case of ) is subjected to challenge in SLP No.3574 of 2024, ent, we make it clear that is subject to outcome of the ue against the decision of this Ravindru Reddy (l srtPra). t either of the parties, if theY tition seeking revival of this ision of the Hon'ble SuPreme same rssue. t petition stands allowed in the issue of jurisdiction IS the impugned notice under ( ( (
I'l 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 Kankanals Ravindra Reddy (l supra). There shall be no order as to costs Consequently, miscellaneous petitions pending, if any, shall stand closed. A. JAYASREE i/// APst t, ANT REGISTRAR To, I \ sEcTtoN oFFtcER Assessment Unit, lncome Tax. D€partmejt, Nationali assessment centre, New D^elhi, Room No.40.t , 2nd Fldor, e-nimp, Jlwahrrfri f.f"f,r, Strai*i, New. Delhi. -1 '10003 lncome Tax Officer, Ward 5(.t ), lT Towers 10-2-3, A.C Guards, l\4asab Tank, Hyderabad. 500004 Principal Chief Commissioner of lncorne Tax, Andhr.a praCesh and Telangana, Hyderabad Room No.922, bt-Fio.jils,b'toct<, l. i. iowers, 10_2-
A.0 Guards, Masab Tank, Hyderabad. SOOOO+. - -' IP.9":l"ISry,-.[9 union or rndia, rr,linistry oiFinance, Department of Kevenue, Litrect taxes. Government of lndia, North Block, Ground Floor, Sansad Marg. New Delhi-1 10001. 9f 99 to .Sri Tejprakqsh Toshniwat Advocate IOPUCI une CC to [Vls. Bokaro Saona,Reddy (Jr. SC foilncome Tax; tOpUC] one cc to Sri Gadi prave6n t<r.iiid"prtis"ori.it"oi'i"n"rar of rndia[opUC] Two CD Copies 2 3 4 6 7 B TJ GJv \ i , I ! I I l 1
, 6 HIGH COURT DATED:0210512025 ORDER WP.No.14325 ot 2025 ALLOWNG THE WRIT PETITION WITHOUT COSTS o$ s r,q 16: ,/ lt :j C.) 13 rlJB zffi t+ oI
More judgments on Section 147
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Vinod Agrawal, Kawardha vs Assisstant Commissioner of Income Tax…ITA 666/RPR/2026[2019-20]Status: Heard21 Oct 2026AY 2019-20
- Sar Business Tradelink Private Limited… vs Income Tax Officer, Ward - 1(2), RaipurITA 599/RPR/2026[2014-15]Status: Heard21 Oct 2026AY 2014-15
- Tarunaben Maganlal Bhut, Navagam vs ITO Ward 2(2)(1), RajkotITA 673/RJT/2026[2024-25]Status: Disposed21 Oct 2026AY 2024-25
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
Recent GST High Court judgments
Search GST case law →- Sri Hardik Gowda vs. Sri Jayaram PKarnataka · 3 Nov 2026
- Shiv Ram vs. State Of Hp And OrsHimachal Pradesh · 3 Nov 2026
- M/S Ampl Resources PVT. LTD., Through Sri Om Prakash Pareek, Authorised Signatory vs. The State Of JharkhandJharkhand · 3 Nov 2026
- Saleem vs. The Union Of INDIA And 4 OrsGauhati · 3 Nov 2026
- Ms R Ess Iron And Steel PVT LTD vs. Union Of INDIA And OrsGauhati · 3 Nov 2026
