Meena Mirmira vs. The Income Tax Officer

This is a writ petition where the proceedings are either challenged to the notices which were issued under Section l4gA 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 l48A of the Act and the subsequent initiation of proceedings under Section l4g of the Act by the jurisdictional Assessing Officer, whereas in terms of the amendment that was brought to the Income Tax Act by way of Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings

The said judgment passed by this court has also been subsequ.r tly followed in a large number of writ petitions which were allor.r t C on similar terms. ' [Q023) 156 taxmann.com I7g (Telangana)]

Down the line, we find that the same issue has also been decided against the Revenue by various High Courts i'e" OF INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA3' Punjab and COMMISSIONER OF INCOI\{E TAX5 where the issue was in case of GOVIND SINGH vs' INCOME TAX OFFICERT' Gujarat High Court in the case of MANSUKTIBHAI 'pzozq464 ITR 430 (Bom) ' i}ozi) 156 taxmann.com 478 (Gauhati)l ^l(2024) 165 taxmann.com 115 (Punjab & Haryana)l ' 12024) 167 taxmann.com 41 I (Telangana)l " 12024) 166 taxmann.com 679 (Bombay)l 'iZOZqi 165 taxmann.com I t3 (Himachal Pradesh)l

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 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 l48A and under Section 148 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 vrit petition be disposed of in the teeth of the decision rendered t,' this Court in the case of Kanakala Ravindra Reddy (l supra), lr,i med Standing Counsel for the Income Tax Department contends trr rt those would unnecessarily burden the Income Tax Departmer I where they would be required to file equal number of SL.'s belore the Hon'ble Supreme Court and it would be further rurdening the exchequer of the Union ofIndia. It was also the cor tention of the learned Standing Counsel that no prejudice would tt caused to the interest ofthe petitioners in case if this writ petition i kept pending till the finalization of the SLPs pending befor: the Hon'ble Supreme Court and the fact that the petitioner is alr:ady enjoying the benefit of interim protection. Nonetheless, on thr earlier query of this Court as to why the Income Tax Department I ave not come out with a mechanism to issue appropriate ins[u_cti, ,ns or to take I

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 concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section l51A of the Act and as a result by now, more than 600 to 700 petitions have been already got piled up belore 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 Kqnqkala Ravindra Reddy (l supra), the Dlvision Bench while reserving the right of the Revenue, has also protected the interest o[ the petitioners -''*"'".'l

It appears that because ofthe aforesaid liberty r Court had granted permitting the Revenue lbr irr proceedings as a one-time measure in a faceless Income Tax Department wants to take advantage o - protracting these proceedings which would enable thc r limitation that would otherwise come in the way. I-iL writ petition is kept pending for a considerable long p, and finally at a later stage if the Hon'ble Supreme C: the decision taken by this High Court as also by tht Courts in which the SLPs are still pending, the rat this High tiating fresh manner, the lhe same by r to meet the :wise, if the riod of time .r rt confirms other High ncome Tax

The alarming trend of docket explosion in this Court, despite the clear precedent set rt Kanakala Ravindra Reddy (l supra), is a matter of grave concem. The Income Tax Department's persistent initiation of fresh proceedings, disregarding the established judicial 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 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

Another aspect which needs to be considered i;that in fact it should have been realized by the Income Tax Depar_r rent itself and should have found out via media in ensuring the. proceedings under Sections 148-4 and i48 should not have bs n issued in a faceless manner, at least till the Hon'ble Supreme Cc urt decide the twelve hundred (1200) odd SLPs which it is already s:ized ofor, at least the Income Tax Department should have fc r nd out some remedial steps to ensure that wherever the authori ies intend to initiate proceedings under Sections 148-A and 148, c:her than in a faceless manner, the proceedings should have b:en deferred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after he SLp,s are decided by the Hon'ble Supreme Court on the ver., same is-sue. This again, the Income Tax Department, has not beer rble to give a convincing reply, except for the fact that such a de: sion if at all 11 .lr 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 ievel of Central Board of Direct Taxes. Though the learned Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of simitar 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 tong 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 continuously under Sections 148-A and L

In the case of BANK OF INDIA vs' {SSISTANT COMMISSIONER, TNCOME TAXI', on an issue vhether it was justifiable on the part of the Income Tax Depz'r :ment in not following an order passed by the adjudicating autho:i y only on the ground that the appeals are pending, the Divisior Bench of the High Court of Bombay held at paragraph No'25 as ur 1er, viz'' :

Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the 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 otherwise 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 lhe 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 Cbllectors 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 cotrf- lf this healthy - - E

We have dealt with this aspect at some ler;th, because it has been suggested by the leilt ted Additional Solicitor General that the observ€ t )ns made by the High Court, have been harsh orr the officers. lt is clear that the observations of the I igh Court, seemingly vehement, and appa 1 ntly unpalatable to the Revenue, are only intended to urb a tendency in revenue matters which, if allow',' to become widespread, could result in conside r rble harassment to the assesses-public without any b ; refit to the Revenue. We would like to say that the department should take these observations irl the proper spirit. The observations of the High ' )urt should be kept in mind in future and the utmost rr) ard should be paid by the adjudicating authorities arc the appellate authorities to the requirements of it-c cial discipline and the need for giving effect to the cr lers of the higher appellate authorities which are bir ling on them."

What is worrying this Bench more is tht: fact that an endeavour is being made whole heartedly to ensure n )t to generate further litigation on issues which have been laid to r :st by a large number of High Courts all of whom have taken a cc :Isistent stand that the action of the [ncome Tax Department being v olative of the c.'

For all the aforesaid reasons, the impugne j issued and the proceedings drawn by the resl Department is neither tenable, nor sus t The notices so issued and the procedure adopt3 per se illegal, deserves to be and are accord r aside/quashed. As a consequence, all the irn orders getting quashed, the consequential order; by the respondent-Department pursuant to th€ issued under Section '1 47 and '148 would a { quashed and it is ordered accordingly. The rel are quashing the consequential order is on lhe p r that when the initiation of the proceedings it; procedurally wrong, the subsequent orders arl nullified automatically.

The preliminary obiection raised by the pet t sustained and all these writ petitions stands all,> this very jurisdictional issue. Since the impugnec and orders are getting quashed on the ) jurisdiction, we are not inclined to proceed fur t decide the other issues raised by the petitionor stands reserved to be raised and contende,l appropriate proceedings.

Since the Hon'ble Supreme Court had, in t of Ashish Aoarwal, supra, as a one-time rr exercising the powers under Article '142 r Constitution of lndia, permitted the Revenue to p under the substituted provisions, and this Court a the petitions only on the procedural flaw, tlr conferred on the Revenue would remain res(rr notices )ndent- inable. jbeing gly set )ugned rassed rotices c get ,on we rciples lf was l gets f,ner ts led on rotices ,int of lr and which in an 3 CaSe )as u re f the oceed lowing right red to 7 ! \ proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Aqarwal, suPra.

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 (l supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, preferred byJhe Income Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP prefened by the Revenue against the decision ofthis High Court in the case of Kanakala Ravindra Reddy (l stpra)' 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. lg. Accoidingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction 1S concerned. As a consequence, the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed

The Assessment Unit, lncome Tax Department, Na\on: e- Assessment Center New Delhi, Room No 401, 2nd Floor, E-Ramp -z waharlal Nehru Stadium, New Delhi '1 10 003. 3. One CC to Ms. HIIVANGINI SANGHI, Advocate [OPU['] 4 One CC to Ms BOKARO SAPNA REDDY (Jr SC FOF NCOME TAX) Advocate [OPUC]

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