Anjaiah Ache vs. Income Tax Officer Ward 1

This is a writ-petition whle challenged tlo the notioes which were the procecdings are either issued under Section t48A and 148 of the Income Tax 6l (for short 'the Act') or the assessment orders those ha passed under Section 147 of the Act which have been assailed

This writ petition is being talgcn up today only on one of the grounds, that the notices issued der Section l48A of the Act and the subsequent initiation of prqceedings under Sectiorr 148 ol the Act by the jurisdictional As sing Officer, whereas in terms olthe amendment that was broughtr to the [ncorne Tar Act bl rvay ::l of Finance Act, 2021 w.e.f., Ot.fa.Z02l onwards, procecdings )t!trz_F,r .. r:-E;.:.e..

The contention of the petitioner is ttrat the issue of proceedings being in violation of the Finance A,ct,, 2021 i.e., the impugned notices under Section l48A and Secti<ln 148 of the Act not being issued in a faceless manner, have alnrady 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 \vere allowed and the proceedings initiated under Section l48A as also under Section 148 of the Acr were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section l5lA of the Act read with Notification 18/2022 dated29.01t.2022. The said judgment passed by this Court has also been subsequently fotlowed in a large nurnbcr of writ petitions which were allowed on sirnilar terms. ' [(202] ) I 56 raxmann.corn I 78 (Telangana)l -\

Down the line, we nna tfr[t the same issr.re has also been decided against the Re,uerxre py various High Courts i.e., by the Bombay High Court if, th" "ur" of HEXAWARE OF INCOME TAX & OTIIE , Gauhati High Court in the case ABHIN ANILKUMAR SIIAII v+. INCOME TAx OFFICER, INTERNATIONAL TAXATIOI w+rictr is again on inrernarional of MANSUKI{BHAI hco [*" t 1:o:-11464 ITR 430 (Born) ' [( 2o]J ) I 56 taxmann.com 478 (Cafta+i)l '[(2021) t 65 raxmann.com t tS,(punjad & H 1202.+) 167 raxmann.com al I flelangqna)l llO2-l ) I 66 raxrnann.cotn 679 (Bombav)l ll02l) lt j ra\mann.com f r: iffima*rlifr aryana)l adesh)l "/<

Even though the same issue having been decided by a large number of tligh Courls, wc are still confronted with large fiIing of identical matters on daily basis ranging betu'eern 5 to 10 writ petitions. 'l'hat upon the instructions being s'lught from the Department. they have been taking a solitary ground that the decision ol the Bombay High Court in the ':ase of Hexaware Technologics Lld., (2 supra) as also the one which has been decided b1' this Court in the case of Kanakala Ravindra Reddy t202+ scc t)nl-ine Guj 4012 '2025 SCC ()nl-ine Jhar 287 'o12023'. R.f -.1l):4984-Dl) | v ( t'

To a query being put to the Iparned counsel for the Revenue, they have categorically accepted fact that there is no interim order granted by the Hon'ble S Court in any of these matters pending before it. M while, fresh writ petitions of identical nature are being piled up before this Bench on daily basis and the pendency is getting increaped on matter which otherwise has already been dealt and decided ff this veV High Court itself.

On the one hand, even thou the order of this Court that rvas passed as early as on 14.09.2 23 and. more 16 months have lapsed, till date, we do not find ahy remedial steps having been taken by the [ncome Tax Departm{nt to take appropriate steps to either hold back issuance of notice under Section l48A and under Section [48 ol tl.re Act by the juiisdictional Assessing Officer, lather the authorities concemed in Ilhe 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 tlecision rendered by this Court in the case of Kanakala Ruvindra Reddy (l supra), leamed Standing Counsel for the Income Tax Department conten,Js that those would unnecessarily burden the Incorne Tax Departnlent where they would be required to file equal number of IiLPs before the Hon'ble Supreme Couft and it would be furr.ht:r burdening the exchequer of the Union of India It was also the contention of the leamed Standing Counsel that ntt 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 b,:fore the Hon'ble Supreme Court and the fact that the petitioner is already enjoying the benefit of interirn protection. Nonetheless, on the earlier query of this Court as to rvhy the Inconte Tax Departnlent have not come out with a mechanism to issue appropriate instructions or to take

As a result of which. *tut *L are facing is steep increase of litigation day in and day out even though variols orders have been passed by this High Courr allowing writ petitions on the very same appropriate steps in ensuring that of the Act as also the assessment rssue. The Income Tax authorities 2O25 also initiating proceedings in of Section 15 lA of the Act and as roceedings under Section l48A orders under Section 148 of the toncemed are still even now in contravention to the provisions p result by now, more than 600 to 700 petitions have been already got piled up before this High Court on an issue which otherwise ds squarely covered by the judgment of this Court in the case,of Kanakala Ravindru Reddy ( I supral. What is also surprisinq is the fact that though while allorwing the writ petitions in the case of Kanakala Ravindra Reddy (l supra), rhe Division Benoh while reserving the right of the Revenue, has also protected e interest of the petitioners \i l'

Another aspect which needs to be considerecl is that in fact it should have been realized by the [ncome Tax Department itself and shouldhavefoundoutviamediainensuring,thatproceedings under Sections l4E-A and 148 should not havt: lreen issued in a faceless manner, 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 hav': lburrd out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and l4tl' other than in a faceless manner, the proceedings should ha"'r' hecn deferred without precipitating the matter further intimatiltg the assessee that they shall initiate appropriate proceedings only aftcr the SLP's are decided by the Hon'ble Supreme Court on 1[13 "er1' satne issue' This again, the Income Tax Department, has not b':en ahle to give a convincing rePly, except lor the fact that such a clccision if eet all has to be taken, has to be taken otherrvise has to be by way of a p level of Central Board of Dire Standing Counsel for the Income the Delhi High Court dismissed a the one hand when the High C pendency, such notices which petition are forcing tlre assessee Court resulting in filing of hundred the long run not only affects the d also consumes substantial time o matt€rs again and again on daily b matter before the Hon,ble Suprem many occasio{ls, the Hon'ble Su matter has been reluctant in grantin Income Tax Department. yet, th State level are not ready to accept t of High Courts of diflerent States o things further worse, the [ncome audacit5i by issuing notices continuo G i ilriP;ffi rEz:ri-.-i:- ; l 7 r the whole of India, and which ticy decision and that too at the t Taxes. Though the leamed ax Departrnent contended that it petition of similar nature, on is struggling to reduce its under challenge in this writ knock the doors of this High of new writ petitions which in sposal of the writ petitions but the Bench in hearing these is. Admittedly, in spite of the Court having been taken on e Court which is seized of the any interirrr protection to the authorities concerned at the e verdict passed by a majority the same issue; and to make Tax Department is showing sly under Sections 148-4 and 72 148 through the jurisdictional Assessing Offrce:r rvhereas it ought 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 lnconne Tax vs' smt' Godavaridevi Sarafr2 as also the recent decisic'n of the co- ordinate Bench of this Court in Samp Furniture (P) Ltd' v' ITO'3 of which one of us (Justice G.S. Kulkarni) was a rnember' wherein the Court categorically observed that the Reventre having not "accepted' the judgment of the High Gourt would not mean that till the same is set as'Hle in a manner known to law' it would loose its binding force. Referring to the decision of the S'upreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd'l{ the Court observed that the approach of the o6i"1315 r:f Revenue of treating decisions being "not acceptable" was criticrzed by the Supreme Court. ln such decision, following aro the relevant observations made by the Supreme Court " 11zoz51 170 taxmann.com 422 (Bombay)l '' 1t9281 l t3 ITR 589 (Bombay) '3 7202+1165 taxmann.com 581/300 Taxman 452 (tlcrrbay) tr 1tss21 taxmann.com l6155 ELT 433 (SC)

We have dealt with this aspec{ at sonre 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 o' the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which' if allc'wed to become widespread, could result in considerable harassment to the assesses-public without zrny benefit to the Revenue. We would like to say that the department should take these observaticns in the proper spirit. The observations of the lligl Court should be kept in mind in future and the utrnost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial drscipline and the need for giving effect to th'-l orders of the higher appellate authorities which are binding on them." I 5. What is worrying this Bench more is the f'act that an cndeavour is being made whole heartedly to ensure not to generate hrrrher litigation on issues which have been laid to rest by a large rrunrber ol l{igh Courts all of whom have taken I consistcnt stand that the action of the lncome Tax Department being violative of'the Finance Acg202O and Finance the interest of ttre Reventre as also trite at this juncture, if we dis observation /direction that the dis terms of the judgrrent rendered Kankanala Ravindra Reddy (l st the outcome of the SLPs which Department and which is pending Supreme Court.

In the given facts and circ considered opinion that unless and of mattem which are squarely co and which stands fortified by the High Courts on the very same iss Court would further. be burdened and disposed ofas a covered matter.

So far as the interest of the the considered opinion that the inte been considered ard protected, as h 2021 . Now, in order to protect that ofthe assessee, it would be of the writ petition with an of the instant writ petition in this High Court in the case of ra) shall however be subject to filed by the Income Tax sideration before the Hon'ble tances, this Bench is of the until we do not timely dispose by the decision of this Court decisions of the various other the pendency of this High hich otherwise can be decided venue is concemed, rve are of of the Revenue ['ras already been observed in paragraphs

For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent- Deparlment is neither tenable, nor stlstainable 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 respondenhDepartment pursuant to tle notices issued under Section 147 and 148 wouk, also get quashed and it is ordered accordingly. The 'eason we are quashing the consequential order is on th€r principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders atso gets nulhlied automaticallY.

The preliminary objection raised by the F'etitioner is sustained and all these writ petitions stands ;rllowed on th s very iurisdictional issue. Since the impugned notices and orders are getting quashed on the point of jur-isdrction, we are not anclined to proceed lurther and decide the other issues raised by the Petitbner which stands reserved to be raised and conten'led in an approprrate proceedings. 38 Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-tim€ measure exercising the powers under Article 14il of the Ccnstitution of lndia, permitted the Reventle to proceed under the substituted provisions, and this Oourt allowing the pettions only on the procedural flaw the right r (

We would only further like we are inclined to dispose of the the fact that the earlier ord€r of Kanakala Ravindra Reddy (l xt before the Hon'ble Supreme Co preferred by the Income Tax allowing of the instant writ petiti atbresaid SLP preferred by the Rev High Court in the case of Kan This, in other words, would mean so want, may move an appropriate rvrit petition in the light of the dec Court in the pending SLP on the I 9. Accordingly, the instant wri lavour of the assessee so far as concerned. As a consequence, challenge under Sections 148-..4' and 148 stands set aside/quashed. t7 ld remain reserved to nt from the stage of the h the case of Ashish mate observations that since 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 is subject to outcome of the against the decision of this Ravindra Reddy (1 supra) t either of the parties, if they tion seeking revival of this ion of the Hon'ble Suprerne same lssue petition stands allowed in the issue of jurisdiction IS impugned notice under l l I i , I I I I 1 l I i I I I l

The Principal Chief Commissioner of lnmme Tax A,P and TS, 'l0th Floor, C- Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabarl-tiOO004. 3. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, tvtinistry of Finance, Rotln No.4O1,2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-1 10003

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