BikshapathiNiggula vs. Income Tax Officer Ward 1

This is a writ petition where the proceedings are either challenged to the notices which were issued under Section 148A and t48 of the Income Tax Act, 1961 (for short 'the Act') or the assessment orders those have been pAssed under Section 147 of ,I the Act which have been assailed.

This writ petition is being taken up today only on one of the grounds, that the notices issued unde[ Section 148,4. of the Act I and the subsequent initiation of proce(dings under Section 148 of the Act by the jurisdictional Assessin Officer, whereas in terms of the amendment that was brought to fhe Income Tax Act by way 021 onwards, proceedings $ of lrinance Act, 2021 w.e.f., 01.04 41

The contention of the petitioner is that the issue of proceedings being in violation of the Financ e Acl, 2021 i.e., the impugned notices under Section 148.4 and Section 148 ofthe 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 148A as also 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 Section 1 5 1A of the Act read with Notification 18/2022 dated29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allorved on similar terms. '[(2023) 156 taxmann.com 178 (Telangana)] I ( i \-i\1 \

OF INCOME TAX & OTHERS2, Gauhati High Court in the case respect of intemational taxation, eoq[bay High Court in the case of INTERNATIONAL TAXATION6 {"ni"n i, again on intemational I Iaryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF lNDlA4, and Telan$ana High Court in the case of Gujarat High Court in the (ur" of MANSUKHBHAI ' 7zoz11464 ITR 430 (Bom) I '[(2024) 156 taxmann.com 478 (Gauhati)] ^ l(2024) 165 taxmann.com I I 5 (Punjab '12024) [67 taxmann.com 4ll (Telangai " 12024) 166 taxmann.com 679 tBombay] ' 120241 165 taxmann.com I l3 (l Iimach4 & Haryana)l na)l )l rl Pradesh)l

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 I 0 writ petitions. That upon the instructions being sougl.rt from the Department, they have been taking a Solitary ground that the decision of the Bombay High Court in the case of Hexawore Technologies Lld., (2 supra) as also the one which has been decided by this Court in the case of Kanakala Ravindra Reddy 82024 SCC Online Guj 4012 '2025 SCC Online lhar 28'7 ' o 12023, RJ -JD : 49 84-DB l ( J

To a query being put to the lea order granted by the Hon'ble Sup m Courl in any of these matters pending before It. M e fresh writ petitions of identical nature are being pited up beflore this Bench on daily basis i and the pendency is getting increase]d on matter which otherwise has already been dealt and decided by] this very High Court itself. I

On the one hand, even thougl the order of this Court that was passed as early as on 14.09.20213 and more 16 months have lapsed, till date, we do not. trnd any DeoartmenI 'l remedial steps having been taken by the Income Tax to take appropriate steps to either hold back issuance of notice der Section 148A and under e ei L \ih ean Section 148 of the Act by the juri dictional Assessing Officer, teeth of series of decisions F rather the authorities concemed in th

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 Ravindra Reddy (1 supra), leamed Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to hle equal number of SLPs before the Hon'ble Supreme Court and it rvould 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 till the finalization of the SLPs pending before the Hon'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 instructiot-ts or to take

As a result of which, what we facing is steep increase of litigation day in and day out even thc ugh various orders have been passed by this High Court allowing vl,rit petitions on the very same issue. The Income Tax authorities c ncemed are still even now in 2025 also initiating proceedings in c ntravention to the provisions of Section 151A of the Act and as a esult by now, more than 600 to 700 petitions have been already ot piled up before this High Court on an issue which otherwise s ds squarely covered by the judgment of this Court in the case f Kanukala Ravindra Reddy ( 1 supra). What is also surprising s the fact that though while allowing the writ petitions in the ase of Kunakala Ravindra q Reddy (1 supra), the Division Benc while reserwing the right of p interest of the petitioners the Revenue, has also protected th

The alarming trend of docket elrplosion in this Court, despite the clear precedent set in Kanakula Aavindra Reddy (1 supra), is a matter of grave concem. The Incomd Tax Department's persistent initiation of fresh proceedings, disregi rding the established judicial Rev f the enue $e I DC matters at a much later stage neficial to the Revenue and pronouncements, has led to an unpr! with over 600-700 peritions piling q deliberate approach not only ,nd".*l precedent but also slrains rhe judicial ] Deparlment's strategy of, awaiting f he I pending SLPs while continuing to appears to be a calculated move to limitation periods, rather than adheri Dcedented surge in litigation pp on the same issue. This nes the principle of judicial resources unnecessarily. The Supreme Court's decision on initiate fresh proceedings buy time and circumvent ng to the established legal

Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Deparlrnent itself and should have found out via media in ensuring that proceedings under Sections 148-4 and 148 should not have been 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 ofor, 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 manrer, the proceedings should have been defened without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after 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 i

Mr. Paridwalla has rightly drawn out attention to the 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. tt 71ZOZS1 170 taxmann.com 422 (Bombay)l " 1tslsl 113 ITR 589 (Bombay) " 1Z0Z+1 165 taxmann.com 581i300 l-axman 452 (Bombay) 'o leOZltaxmann.com 16/55 ELT433 (SC) r r' i ; I

Sri Reddy is perhaps riE officers were not actuated passing the impugned ord otherwise of their conclusi fht in saying that the [y any mala fides in Lbr. They perhaps o appellate orders in were placed before [as, in our view, rightly lsistant Cotlectors and t caused by the failure pct to the orders of I appetlate hierarchy. lt I fnhasized that it is of I disposing of the i,, ,."r"nr" officers are I appellate authorities. fctor is binding on the frin his iurisdiction and fng upon the Assistant f,ttector. who function I f nal. The principles of le orders of the higher jtotlo*"0 unreservedty llhe mere fact that the iis not "acceptabte" to piectionable phrase - pppeal can furnish no [ss its operation has lt court. lf this healthy genuinely felt that the claim o the assessee was not tenable and that, if it was would suffer. But what Sri Re are not concerned here w pted, the Revenue dy overlooks is that we the correctness or or of any factual malafides but with the fact that in their conclusion, by-passed regard to the same issue whi he officers, in reaching them, one of the Collector (Ap the Tribunal. The High Court I criticized this conduct of the A the harassment to the assesse of these officers to give eff authorities higher to them in the cannot be too vehemently en utmost importance that, ir quasijudicial issues before then bound by the decisions of the The order of the Appellte Colle Assistant Collectors working wit the order of the Tribunal is bind Collectors and the Appellate C under the jurisdiction of the Tribl judicial discipline require that th appellate authorities should be by the subordinate authorities. order of the appellate authority the department - in itself an o and is the subject matter of an ground for not following it unk been suspended by a competen eals) and the other of 74 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."

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 that the action of the Income Tax Department being violative of the l \] .I I't

Now, in order to protect the interest of the Revenue as also th t of the assessee, it would be trite at this juncture, if we dispose observation/direction that the disposa] terms of the judgment ,.na.r"a Uy tf KanAanala Ruvindra Reddy (t .rpr! the outcome of the SLPs *ni.f, *J of the writ petition with an I of the instant writ petition in [is High Court in the case of ) shall however be subject to ne filed by the Income Tax Department and which is pending con]pideration before the Hon'ble Supreme Court 16. [n the given facts and circums]Itances, this Bench is of the considered opinion that unless and urlfiil we do not timely dispose of matters which are squarely covered by the decision of this Court - and which stands fortified by the dePisions of the various other High Courts on the very same issue, the pendency of this High Court would furlher be burdened whiiph otherwise can be decided and disposed ofas a covered matter.

So far as the interest of the Rev nue is concemed, we are of of the Revenue has already the considered opinion that the intere been considered and protected, as has een observed in paragraphs

For all the aforesaid reasons, the impugned notrces 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 consequenttal 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 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-time measure exercising the powers under Article 142 of the Constitution of India, permifted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right r a 17 conferred on the Revenue proceed further if they so uld remain reserved to t from the stage of the in the case of Ashish vYo *4n order of the Supreme Cou Agarwal, supra.

We would only further like to make observations that since we are inclined to dispose of the ins{ant writ petition, conscious of the fact that the earlier order ol this High Court in the case of Kanakalu Ravindra Reddy (l sup ) is subjected to challenge before the Hon'ble Suprelne Cou in SLP No.3574 of 2024, prefened by the Income Tax Deparfment, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Reve ue against the decision of this ,rr thfr High Court in the case of Kanak Ravindra Reddy (l supra). This, in other words, would mean either of the parties, if they so want, may move an appropriate pptition seeking revival o( this writ petition in the light of the decipion of the Hon'ble Supreme Court in the pending SLP on the very same issue.

Accordingly, the instant petl stands allowed in favour of the assessee so far the issue of jurisdiction 1S concerned. As a consequence, {he impugned notice under l, ( ( tlon writ ASL challenge under Sections 148-A and 148 stands set aside/quashed \