PRIMARY AGRICULTURAL COOP CREDIT SOCIETY LIMITED TOOPRAN vs. The Income Tax Officer Ward 1

This is a writ petition where the proceedings are either chalienged to the notices which were issued under Section 148A and 148 of the Income Tax Act' t961 (for short'the Act') or the assessment orders those have been passed under Section 147 of the Act which have been assailed'

This writ petition is being taken up today only on one of the grounds, that the notices issued under Section 1484. of the Act and the subsequent initiation of proceedings under Section 148 of the Act by the jurisdictional Assessing Officer' whereas in terms oftheamendmentthatwasbroughttothelncomeTaxActbyway of Finance Act, 2021 w'e'f'' 01'04'2021 onwards' proceedings

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 14gA and Section l4g ofthe Act not being issued in a faceless manner, have already been dealt with and decided by this Courr in the case of KANKANALA RAVINDRA REDDY vs. TNCOME_TAX OFFICEI{T decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section r4gA as arso 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 of Secrion 15 tA of the Act read with Notification 1gl2}22 d,ated.29.03.2022_ The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were aflor,ved on similar manner terms. ' [(2023) 1 56 raxmann.com 17g (Telangana)] , ., : 'r.: ' I ..r:.. .a 'fr,. i}il{ .la*^:t 'jffss I

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 nature are 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'

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 tapsed, titl 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 1484 and under Section 148 of the Act by the jurisdictional Assessing Oflicer' rather the authorities concemed in the teeth of series of decisions '1

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 concemed are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 151A of the Act and as a result by now' more than 600 to ?00 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 Kanukala Ravindra Reddy (1 supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kanakala Ravindra Reddy (l supra), the Divisiqn Bench while reserving the right of the Revenue, has also protected the interest of the petitioners ,'

The alarming trend of docket explosion in this Court' despite the clear precedent set in Kanakalo Rovindra Reddy l1 supra)' is a matter of grave concern' The Income Tax Department's persistent initiation of fresh proceedings' disregarding the established iudicial 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 Deparlment'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 \:,

Mr. paridwalla has righfly drawn out attention to the "accepted" the judgment of the High Court would not mean that till ',) 11zl32t .t.t o yax mann.com 422 ( B ombay \ l '.'11978) I l3 ITR 589 (Bombay) t,j,7ZOZ41l65 taxmann.com 5gl/300 Taxman 452 (Bombay) 'a llegZl raxmann.com L6/55 ELT 433 (SC) .t

Sri Reddy officers were passing the is perhaPs right in saying that the not actuated bY anY mala fides in impugned orders. TheY PerhaPs genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otheruvise of their conclusion or of any factual malafides but with the fact that the officers' in reaching in their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one 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 the harassment to the assessee caused by the failure of these officers 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 quasijudicial 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 jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly 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 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 l

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 Courl, have been harsh on the officers. lt is clear that the court, seemingry ,un", oot"t"t'ons of the High unpatatabre to rhe Revenue,:::'"",;;:".::ff:,.,J 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 futu shourd be paid by rhe ,.,".,jil:liltf""::'iil: appellate authorities to the disciptine and the need r".. n,r#'"",[:,':;:':::: of the higher appellate authorities which are binding on them."

What is worrying this Bench more is the tact 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 Depaftment being violative of the 15 Finance Act, 2020 and Finance Act,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 Retldy (1 supra) shall however be subject to the outcome of the SLPs which were hled by the Income Tax Department and which is pending consideration before the Hon'ble Supreme Coutl.

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 Coutt 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 furlher 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 l ! I I I t I I

For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent_ Department is 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 l4gwould 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 petitloner ls 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 and contended in an appropriate proceedings.

Since the Hon,ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one{ime 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 right the petitions only on the procedural flaw, [ ...

We would only fuither like to make observations that since we are inclined to dispose of the instant writ petition' conscious of thefactthattheearlierorderofthisHighCourtinthecaseof Kunakala Ravindra Redcly (l supra) is subjected to challenge before the Honrbte Supreme Court in SLP No'3574 of 2024' preferred by the lncome Tax Department' we make it clear that atlowing 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 supta)' 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 same issue'

Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction is concerned. As a consequence, the impugned notice under challenge under Sections 148-4 and 148 stands set aside/quashed' ( {

The principal Chief commi*ioner ofi"t".i"'ii^'?"rangana and A.p, iJfl?,.ff# rr rowers, nc criios]r'ra# ;r"11 Hyoeibaa s060)b,

The Chairman, Central Board of Direct Taxes, Department of Revenue, HA';,&.r Finance, covernment oi r,i,lirls".rJtIlilt Buldinss, New Dethi - 4 The National Faceless Assessment Center, lncome Tax Depa(ment, New

The Secretarv to the Government, Union of lndia. Department of Revenue, ^ Ministry of Finance, New Dethi _ i f OOOi' " o. Une CC to SRI THANNERU, CHAITAN'A KUMAR, Advocate toPUCI 7 .ne cc to r\,4s J.suNrrHA (JUNidR'56'iO"d'iilbbrr,,e rAX)Advocdre loPUCl

One CC to SRt GAD| PRA.VEEN KUMAR, DEpUTy SOLTCITOR GENERAL ^ OF lNDIA, Advocate (OPUC)

One CC to SRt p.SHASHIDIIAR REDDY, Advocate (OPUC)

Two CD Copies G t'i,