Sri Bramaramba Mallikharjuna Swamy Temple, vs. The Income Tax Officer,

This is a writ petition where the proceedings are either challenged to the notices which were issued under Section 14gA and 148 of the Income Tax Act, 1961 (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 l4gA of-the Act and the subsequent initiation ofproceedings under Section l4g of the Act by the jurisdictiona[_Assessing Offrcer, whereas in terms of the amendment that was brought to the Income Tax Act by way

The contention of the petitioner is that rhe issue of proceedings being in violation of the Finance Acl' 2021 i'e'' the impugned notices under Section l48A and Section 148 of the Act not being issued in a faceless manner' have already h'een dealt with and decided by this Couft 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,{ as also under Section 148 ol the Act were heid to be bad with consequential reliefs on the ground of it being in violation of the provisions of 'section l51A of tlre Act read with Notihcation l8l2)22 dated2g'03 2022' The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were all'rwed on similar manner. terms ' l(2023) 1 56 taxmann.corr-pS (Telangana)l

Even though the same issue having been decided by a large number of High Courls, we are still confronted wittr large friing of identicalmattersondailybasisrangingbetweer,5tol0writ petitrons. That upon the instructions being sought from the Department, they have been taking a solitary 6iround that the decision of the Bombay High Court in the cas': of Hexaware Technologies Ltd', (2 supra) as also the one rvhich has been decided by this Coi't in the case of Kanakala Ravindra Reddy "2024 sCC online Guj 4012 "2025 SCC OnLine Jhar287 ' o 72023 : RJ-JD :4984-DBl j l t I t I I I I I I II I Ii I I

To a query being put to the leamed 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 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 l4gA and under Section I48 of the Act by the jurisdictional Assessing Officer, rather the authorities concemed in the teeth of series of decisions

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 Kanakala Ravindru Reddy (I supra)' learned Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Deparlmen t where they would be required to frle equal number of SUPs 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 leamed Standing Counsel that no prejudice would be caused to the interest of the petitioners in case if this writ petition is kept pending tillthefinalizationoftheSLPSpendingbeforetheHon,ble Supreme Court and the fact that the petitioner is already enjoying the benefit 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 instruciions or to take

As a result of which, what we are facing is steep increase of Iitigation 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 l5lA of the Act and as a result bynow, more than 600 to 700 petitions have been already got piled up befbre 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 Reddy (l supra), the Division 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 clearprecedent set in Kanakala Ravindra Reddy (lsupra), is a matter of grave concern. The Income Tax Depaftment,s persistent lnrtration of fresh proceedings, disregarding the established judicial pronouncements, has led to an unprecedented surge in litigation with over 600_700 petitions piling up on lhe same issue. This deliberate approach not only undermines the principle ofjudicial precedent but also strains thejudicial 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 i I 1

Another aspect which needs to be considered is that in fact it should have been realized by the lncome Tax Departrnent itself and should have found out via media in ensuring that proceedings under Sections 148-A and 148 should not have been issued in a faceless manner, at least till the Hon'ble Supreme Ccurt decide the twelve hundred (1200) odd SLPs which it is already seized ofor' at least the Income Tax Department shouid have frlund 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 shal1 initiate appropriate proceedings only after the SLP's are decided by the Hon'ble Supreme Court on the \1ery same issue' This again, the Income Tax Department, has not beren able to give a convincing reply, except for the fact that such a rlecision if at all 7L 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 Departm*, .*r*O**o 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 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. 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 Income Tax Department. yet, the authorities concemed at the State level are not ready to accept the verdict passed by a majority 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 continuousry under Sections l4g-A and 12 148 through the jurisdictional Assesstng to have been only in the faceless manner' Ofhcer.wheleas it ought

In the case of BANK OF INDIA vs' '\SSISTANT COMMISSIONER' INCOME TAXIr' on an issue vuhether it was justifiable on the part of the Income Tax Depaltrnent in not lollowing an order passed by the adjudicating authonty only on the ground that the appeals are pending' the Division Bench of the High Court of Bombay held at paragraph No'25 as under' viz ' :

Mr' Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of lncome Tax vs' Smt' Lodavaridevi Sarafl2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) l-td' 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 the same is set aside in a manner known to law' it wr:uld loose its binding force. Referring to the decision of the Supreme Court in Unionoflndiavs.KamlakshiFinanceCorporationLtd'14'the Court observed that the approach of the officials of Revenue of treating decisions being "not acceptable" was criticized by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court' x I liI : : !,,1o:s., . r.7-0. t ax m a nn. c o m 4 22 ( B o mb a y)l ,:!:::?l I r] rrR 58e (Bombay) ,"i?:;:l:,1:;:r:#",';,:';:::**452(Bonbay) i t *f f

Sri Reddy is perh officers were ,o, ""nuo" right in saying that fhe passing the ,aornnu'utuo by any mala fides in genuinery fert that the .l . o'0"" They perhaps tenabre and that, if it laim of the assessee was not would suffer. But what *" "t"ot"o' the Revenue are not concerned n.;'i R"dov o'urlooks is that we otherwise of their "onl. l"n the correctness or marafides but with the ,u""'u"'on or of any factuar in rheir concrusio", * ,":l1i':ne officers, in reachins regard. to the same ,arra'"uo two appellate orders in them, one of tne cottector which were placed before the Tribunar. The High "- (Anoeats) and the other or criticized this conduct o, ,;'*-n'., in our view, righfly the harassment to tn" a.".' Assistant corectors and or these orricers to ;;;';ilT';:'I:J:,,:; authorities higher to them in cannor be too vehemenryffij"Tl"Hff:]J 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 Co ector 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

We have dealt with this aspect at some lerLgth' because it has been suggested by thb learned OOO,i"^"' Solicitor General that the observations ;;;; * the Hish court' have been harsh orr the on,""r. lt is clear that the observations of the High tourt, seemingly vehement' and appa'ently unpalatable to the Revenue' are only intended tc' curb ,,"no"n"V in revenue matters which' if allowed to o"ao*" widespread' could result in consid':rable 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 ad.iudicating authorities and the appellate authorities to the requirements of iudicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them."

What is worrying 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 rhat the action of the Income TaxDepartment being violative of the I ! I I i I I i i iI l t I : I i I I I

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.

So far as the interest of the Revenue ts concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs

For all the aforesaid reasons' the impugned llotices issued and the proceedings drawn by the respondent- ,"Ornr"*, is neither tenable' nor sustziinable' fn" noti"", so issued and the procedure adopte'J being Or. "" '*n"', deserves to be and are accordingly set aside/quashed As a consequence' all the impugned orders getting quashed' the consequential orders passed by tne -respondenlDepartment pursuant to the notices ssued under Section 147 and 148would also get quashed and it is ordered accordingly The reason we are quashing the consequential order is on the prrinciples that when the initiation of the proceedings itself was procedurally wrong' the subsequent orders also gets nullif ied automatically'

The preliminary ob.lection raised by the petitioner is sustained and all these writ petitions stands allowed on this very iurisdictional issue Since the impugnc'd 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 Agarwal, suPra, as a one-time the powers under Article 142:' Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Cor.,'rt allOWing the petitions only on the procedural flaw, the right of Ashish exercising measure of the I I I I I I i t t II I I I I I ,t IIi I I, II I

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 (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 Ravindru 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 Court in the pending SLP on the very same issue.

Accordingly, the instant writ petition stands allowed 1n favour of the assessee so far as the issue of jurisdiction ls concemed. As a consequence, the impugned notice under challenge under Sections 148-4 and 148 stands set aside/quashed.

The Principal Commissioner of lncome Tax-2' Hyderabad Siqnature Towers' Sv No.6(P) ot xonoap'ii'"dfi;iPi;i r<oftraguo'a' opp Botanical Gardens' 56rlingampally, Ranga tii'iov' ui'o'"*bad' Telangana-50O084'

The Assessment Unit' lncome Tax Department National Faceless - n.i"...Lni centre, P"iti,S'il*#ii??633,,U"" No 401' 2nd Froor' t- RamP, Jawaharlal Nehrt

One CC to SRI DUNDU MANI/OHAN' Advocate [OPUCI

One CC to tr,4s. J.SUNITHA' Jr. SC FOR INCOIUE TAX IOPUCI

Two CD CoPies BSR GJP -)X i. I I