Wp/31476/2024 Of Primary Agricultural Cooperative Credit Society Limited v. The Income Tax Officer

HIGH COURT AT HYDERABAD(SPecial Original Jurisdiction) THURSDAY, THE [I\,IAY]TWO THOUSAND PRESENT THE HONOURABLE [JUSTICE P.SAM KOSHY]AND THE HONOURABLE [JUSTICE NARSING RAO NANDIKONDA]WRIT PETITION NO:3[ 1476 ][0F ][2024] Between: pRtTMARY AGRICULTURAL cooPERATIVE [cREDIT ][soclETY ][LllvlTlP']iranlx,qpun, n"p [uy ][secretarv-pblicE ][rvrnoHu SUDHAN ][REDDY, ][Sio. ][GoPAL]Rtbiji iolrcr, [oicupati6'i ]['ausinesl-4g90 ]-{^qqt-a3 [vears' ][R/o ] i)iLtXcE ["r-oN-onFun' ][Mni{oni, ][rrrrEDAk ][502295. Telansana, ][lndia. ] , [Assessment ][Year. ][201 ][5-1 ][6']iranlx,qpun, n"p [uy ][secretarv-pblicE ][rvrnoHu SUDHAN ][REDDY, ][Sio. ][GoPAL]Rtbiji iolrcr, [oicupati6'i ]['ausinesl-4g90 ]-{^qqt-a3 [vears' ][R/o ] i)iLtXcE ["r-oN-onFun' ][Mni{oni, ][rrrrEDAk ][502295. Telansana, ][lndia. ] , [Assessment ][Year. ][201 ][5-1 ][6'] .....PETITIONER AND 1. ' The lncome [Tax Officer, ][Ward ][1, ][Sangareddy lncome Tax Office']v.i",:rnnroia ttligir, New Bus Stano,Veera6hadra Nagar, Sangareddy'Telangana-502001 [Telangana State']v.i",:rnnroia ttligir, New Bus Stano,Veera6hadra Nagar, Sangareddy'Telangana-502001 [Telangana State'] 2. The Principal [Chief Commissioner of ][lncome ][Tax,.Telangana ][a!9Ail]' H;;;;ij;5ir r;"-,4;AC cuirds, tvlasab rank, Hvderabad - 500 028'Telangana.' H;;;;ij;5ir r;"-,4;AC cuirds, tvlasab rank, Hvderabad - 500 028'Telangana. 3. The National [Faceless Assessment Center, lncome Tax Department, ][New]Delhi.Delhi. 4. The central [Board ][of ][Direct ][Taxes, Represented.by ][its ][chairman, ][Department]- ;i'R#;;;, rrrrinistrv or rinince, Goveinment of lndia, Secretariat Buildings,New Delhi [- ][110 001 ][.]- ;i'R#;;;, rrrrinistrv or rinince, Goveinment of lndia, Secretariat Buildings,New Delhi [- ][110 001 ][.] 5. The Union [of lndia, Represented ]of Revenue, Ministry [by ]oi [its Secretary ]Finance, New [to-the ]Delhi [Government']- 'l 10 001'- D;p;;;"i - D;p;;;"i .....RESPONDENTS Petition Under [Article ][226 ][of ][the ][constitution of lndia ][praying ][that ][in ][the]circumstances stated [in ][the ][affidavit ][filed ][therewith' ][the ][High Court ][may ][be]pleased to.issue an appropriate [writ, order or direction more ][particularly ][one ][in]the nature of writ [of ][lvlandamus, ][declaring ][the order ][passed by ][the ][lncome Tax] Authorities (National Faceless E-Assessment Centre) complete,cl the assessmentUIS 147 read with section 1448 of the Income-tax Act Date of 05-03-2024, DINITBA/AST/S/14712023-2411061990860(1) for the Assessmen Year 2O1S-16determining the total income of Rs. 1,90,38,4501.as arbitrary, I egal, bad in law,without jurisdiction, void-ab-initio, violative of the principles of naiural justice apartfrom being violative of Articles 1a, t 9(1Xg) and 265 of the Constitution of Indiaand Sec. 148A of the Income Tax Act, 1961, and consequen y set aside thesame in the interests of justice. I.A.NO:1 OF 2024 Petition Under Section 15'1 CPC praying that in the circumstances stated inthe affidavit filed in support of the petition, the High Court m€y be pleased tosuspend the order Under section 147 read with section j 44B cf the lncome-taxAct Date of 05-03-2024, DIN ITBA/ASTlsl147l2o23-24l1061990860(.1 ) for theAssessment Year 2015-16 determining the total income of Rs. 1 ,90,3g,4501 andDemand notice u/s ['1 ]56 of the lncome Tax act 1961, vide DIN and Notice No.ITBAJAST/S/15612023- 2411061990936(1) Dt. 05-03-2024 for the assessmentyeat 2015-16 pending disposal of the above writ petition. Counsel for the Petitioner : SRI THANNERU CHA|TANYA KUMA.R Counsel for the Respondent Nos.1 & 2 : Ms. J.SUNITHA (JUNIOR SC FORrNcoME TAX)rNcoME TAX) Counsel for the Respondent Nos.3 to 5 : SRI cADt PRAVEEN KUMAR, DEpUTySOLICITOR GENERAL OF INDIA The Cout1 made the following ORDER ) Counsel for the Petitioner : SRI THANNERU CHA|TANYA KUMA.R Counsel for the Respondent Nos.1 & 2 : Ms. J.SUNITHA (JUNIOR SC FORrNcoME TAX)rNcoME TAX) Counsel for the Respondent Nos.3 to 5 : SRI cADt PRAVEEN KUMAR, DEpUTySOLICITOR GENERAL OF INDIA The Cout1 made the following ORDER ) THE HONOURABLE SRI [P.SAM ] ANDTHE HONOURABLE SRI JUSTICE NANDIKONDA WRTT PETITION No.31476 [of ][2024] ORDBR, [(per ]Hon'ble [Sri,lustice ][P.Sam ][Koshy)] lleard Mr. T.Chaitanya [Kumar, ][Ieamed counsel ][for ][the]petitioner and Ms.J.Sunitha, [leamed ][Junior Standing ][Counsel ][for]the Income Tax [Deparlrnent ][for ][the ][respondents. ][Perused the]record. 2. This is a writ petition [where ][the ][proceedings ][are ][either]challenged to the notices [which ][were ][issued ][under Section ][148,4']and 148 of the Income [Tax ][Act, ][1961 ][(for ][short'the ][Act') ][orthe]assessment orders [those ][have ][been passed ][under Section ][147 ][of]the Act which have been [assailed.] 3. This writ petition [is being taken ][up ][today ][only ][on ][one ][of ][the]grounds, that the notices issued [under Section 148A ][of ][the ][Act]and the subsequent [initiation of ][proceedings ][under Section ][148 ][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, 2O2l w.e.f., [01.04.2021 ][onwards, ][proceedings] under Section 1,lgA of the Act as also under Section I 4g of theAct ouglrt to have also been issued and proceeded ,n a facelessmanner.Act ouglrt to have also been issued and proceeded ,n a facelessmanner. 4. Thc. contention of the petitioner is that tl ie issue ofproceedings being in violation of the Finance Ac1, llr)2 I i.e., theimpugned notices under section r4gA and Section l zLg of the Actnot being issued in a faceless manner, have ah.eady be,:n dealt withand decided by this Court in the case of KAN,IKANALARAVINDIIA REDDY vs. INCOME_TAX OFFICI]RT decidedon 14.09.2023 whereby a batch of writ petitions were allowed andthe proceecli,gs initiated under section 14gA as also u.rier Section148 of the:\ct were held to be bad with consequcntial re ief! on theground of it being in violation of the provisions of Sectic,n 15 r A orthe Act read wirh Notification 1gl2)22 dated 29.03.20211 The saidjudgment passed by this Court has also been subsequenL,l, fbllowedin a large number of writ petitions which were alrowecr ,rn simirar telms. '[(2023) 156 taxrnann.oom l7g (Ielangana)l 5. Down the 1ine, we find [that ][the ][same ][issue has also ][been]decided against the Revenue by [various ][High ][Courts ][i.e.,]by the Bombay High Courl in the [case ][of ] TECHNOLOGIES LTD., [vs. ] OF INCOME TAX & [OTHERS2, ][Gauhati ][High ][Court ][in ][the ][case]of RAM NARAYAN SAH [vs. ] [INDIA3, ][Punjab ][and]Haryana High Court in the [case ][ol ] vs. UNION OF INDIA4, [and Telangana ][High ][Court ][in ][the ][case ][of]SRI VENKATARAMANA [VS. ] COMMISSIONER OF [where the ][issue ][was ][in]respect of intemational taxation, [Bombay ][High ][Court ][in ][the ][case ][of]ABHIN ANILKUMAR [vs. ] [OFFICER']INTERNATIONAL TAXATION6 [which ][is again on ][international]taxation and central circle, [High ][Court of Himachal ][Pradesh ][in ][the]case of GOVIND SINGH [vs' ] [OFFICER?,]Gujarat High Court in the [case ][of ] ' Tzoz+1464 [430 (Bom)]'l(2024) [156 ][taxmann.com ][478 (Gauhati)l]" l(2024) [165 ][taxmann.com ][115 ][(Punjab ][& ][Haryana)l]'12024) [167 ][taxmann,com ][4l ] [(Telangana)l]" [2024) [166 ][taxmann.com ][679 ][(Bombay)]]' 12024) [165 ][taxmann.com ][1 ][1 ][3 ][(Himachal ][Pradesh)l] ' Tzoz+1464 [430 (Bom)]'l(2024) [156 ][taxmann.com ][478 (Gauhati)l]" l(2024) [165 ][taxmann.com ][115 ][(Punjab ][& ][Haryana)l]'12024) [167 ][taxmann,com ][4l ] [(Telangana)l]" [2024) [166 ][taxmann.com ][679 ][(Bombay)]]' 12024) [165 ][taxmann.com ][1 ][1 ][3 ][(Himachal ][Pradesh)l] DAHYABHAI RADADIYA vs. INCoME TAx: OFFTCER,WARD 3(3XS)8, Jharkand High Courl in the case ot SHyAMSUNDAR SAW vs. UNION OF INDIAe, Rajasthan I ligh Courl inthe case ol SHARDA DEVI CHHAJER vs. INC,OME TAXOFFICEIi. & ANOTHER and batch of wriL petiri,rnsr0 whichstood decided on 19.03.2024. Similar views have alsrt been takenby the Division Bench of Calcutta High Court in rhe case ofGIRDHAII GOPAL DALMIA vs. UNrON OF INDTA & ORs(M.A.T 161)() of 2023),decided on25.09.2024.6. Even though the same issue having been decided by a lar.genumber of High Coufts, we are still confronted with lar,.rie hling ofidentical matters on daily basis ranging between 5 ro l0 rvrirpetitions. 'l'hat upon the instructions being sought fiom theDepartmenl, they have been taking a solitary grounc that thedecision of tl.rc Bombay High Court in the case of l{erawareTechnologies Ltd., (2 supra) as also the one whicb has beendecided by this Couft in the case of Kanakola Ravinttrn Reddy 82024 SCC OnI_ine Guj 4012" 2025 SCC Orrl irrc .thar 287'01202 [3 ][: ]R.t-JI):lsR4_DBl'01202 [3 ][: ]R.t-JI):lsR4_DBl a<ai-d{n [jEr!n.(!nsGrrd!c,,EE:!lr!€r.l] (1 supra) has been subjected [to ][challenge ][in ][a ][Special ][Leave]Petition i.e., SLP No.3574 [of ][2024 ][before ][the ][Hon'ble ][Supreme]Courl and the Hon'ble [Supreme ][Courl ][is ][seized ][of ][the ][matter']In addition, there are [about ][1200 SLPs ][also ][filed ][arising out ][of ][the]same issue being decided [by various ][High ][Courts.] 7. To a query being [put ][to ][the learned counsel ][for ][the Revenue,] they have categorically [accepted ][the-[a9^t--t$t.jh?," ][is ][no ][interim]1riupra,1-...naF-De-q!.Suo1ect.eo.rocnat1engelna-.Dpecrat*!lQavg?'-:-,.ffiiorder granted by the [Hon'ble ][Supreme ][Court ][in ][any ][of ][these]matters pending before it. [Meanwhile, ][lresh ][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 ][Cour-t ][itself'] 8. 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 148A ][and under]Section 148 of the [Act ][by ][the ][jurisdictional ][Assessing ][Officer,]rather the authorities [concemed ][in the ][teeth ][of ][series ][of ][decisions] 8. 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 148A ][and under]Section 148 of the [Act ][by ][the ][jurisdictional ][Assessing ][Officer,]rather the authorities [concemed ][in the ][teeth ][of ][series ][of ][decisions] by all the major I{igh courts in India are conrirlrously stillinitiating pr.oceedings under Section 14gA of the .a.ct and alsoinitiating proceedings u4der Section 14g of t,re Act incontravent iot.r to the arnendments brought into the Incorne Tax Actpursuant to tl're Finance Act,2020 as also the Finance t\ct 2021 .9' Upon a query being put as to why can,t this rvr.il petition bedisposed olin the teeth of the decision rendered by tLis Court inthe case of'Ktnakakt Ravindro Reddy (l supra), leanre:d StandingCounsel for the Income Tax Department contends that those u,ouldunnecessarill, burden the Income Tax Departrnent rdrere theywould be r.equired to file equal number of SLps relore thcHon'ble Suprcme Court and it would be further bur<lening thcexchequer of the Union of Inclia. It was also the contetr:ion of thelearned Standing counsel that no prejudice wourd be catrsed to theinterest of the petitioners in case if this writ petition is kept pendingtill the llnalization of the SLps pending before the l{on,bleSupreme Couft and the fact thar the petitioner is alread.v enjoyingthe benefit o1- interim protection. Nonetheless, on the ear ier quer1,of this Court as to why the Incorne Tax Department have not comeout with a nrecharrism to issue appropriate instrrclions or to take a appropdate steps in [ensuring ][that ][proceedings ][under Section ][1484]of the Act as also the [assessment ][orders ][under Section ][148 ][of ][the]Act are kept in a hold in [the ][light ][of ][the ][decisions dedcided ][by ][the]various High Courts, it [was ][submitted ][by ][the ][leamed ][Standing]Counsel that the said [steps ][can only ][be taken ][at ][the ][level ][of ] as any such steps [would ][have ][to ][be ][taken ][Pan ][India ][and cannot ][be]limited to any of these [jurisdictional High ][Courts'] 10. As a result of which, [what ][we are ][lacing ][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 atso initiating [proceedings ][in ][coritravention to the provisions]of Section 151A of [the ][Act ][and ][as ][a ][result ][by ][now, more ][than 600]to 700 petitions [have ][been ][already ][got ][piled ][up ][belore this ][High]Courl 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 ][Kahukala ][Ravindta]?O?5 alcn inifiatinrr n"...'oor{inc'" [in ][nnn'frorrantinn ][+n ][rhe ]fr;d)l; al riipi"),.'iir" [oiviii"n ][eencl, while ][reserving ][the right ]^;^i';ai^r.'di-[of]the Revenue, [has also ][protected ][the ][interest ][of ][the ][petitioners] - [r.] ;-*iftt- .i:?cs*sirFerr- - [r.] ;-*iftt- .i:?cs*sirFerr- insofar as the l iberly which was granted to the ](evenue rorinitiating tiesh proceeclings strictly in accordance with rhe amendedprovisions of the Act, as amended by the Finance Act, 2020 andthe Finance Acr. 202r . The petitioner assessee u,ourd be entitled toinitiating tiesh proceeclings strictly in accordance with rhe amendedprovisions of the Act, as amended by the Finance Act, 2020 andthe Finance Acr. 202r . The petitioner assessee u,ourd be entitled tochallenge o. r.aise the otlrer legar objections if the Reverue initiatesliesh proceedings. The Department has made no errdeavour inavailing the said liberty that was reserved for the Rcvenue. On thecontrary, thc1, have becn still sticking on to the star.rd, r.vhich thisHigh Court as rvell as many other High Courts alread.,, held to bebad11. It appears that because ofthe aforesaid liberly that this I{ighCourt had granted perrnitting the Revenue for initiating frcshproceedings as a one_time rreasure in a faceless manner., theliesh proceedings. The Department has made no errdeavour inavailing the said liberty that was reserved for the Rcvenue. On thecontrary, thc1, have becn still sticking on to the star.rd, r.vhich thisHigh Court as rvell as many other High Courts alread.,, held to bebad11. It appears that because ofthe aforesaid liberly that this I{ighCourt had granted perrnitting the Revenue for initiating frcshproceedings as a one_time rreasure in a faceless manner., theIncome Tax Depaftment wants to take advantage of tlLer sams !yprotracting thesc proceedings which would enable them tr meet thelimitation that u,ould otherwise come in the way. Likeiiise, if thewrit petition is hept pending for a considerable long pericd of timeand finally ar a later stage if the Hon,ble Supreme Court confirmsthe decision taken by this High Court as also by the other HighCourtsln u'hich the SLpsare still pending, the Incoure .I.ax!yprotracting thesc proceedings which would enable them tr meet thelimitation that u,ould otherwise come in the way. Likeiiise, if thewrit petition is hept pending for a considerable long pericd of timeand finally ar a later stage if the Hon,ble Supreme Court confirmsthe decision taken by this High Court as also by the other HighCourtsln u'hich the SLpsare still pending, the Incoure .I.ax ,,, would [get the ][advantage ][of ][the ][liberty ][that ][is ][otherwise]Department protected in favour of [the ][Revenue ][lor ][initiation ][of ][lresh]proceedings from the [disposal ][of ][these ][matters ][at ][a ][much later ][stage]which would be advantageous [and ][beneficial ][to.the ][Revenue and]would be equally disadvantageous [and ][detrimental ][so ][far ][as ][interest]of the assesses are [concemed. ][As ][a consequence, ][the Income Tax]Department [gets an extended ][period ][of ][time ][for ][initiation of ][fresh]proceedings. 12. The alarming [trend of ][docket ][explosion in this ][Court' ][despite]the clear precedent [set ][in ][Kanakala Ravindra ][Reddy ][(l ][supra)' is ][a]matter.ofgraveConcem.ThelncomeTaxDepartment'spersistentinitiation 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]to be [a ][calculated ][move ][to ][buy ][time ][and ][circumvent]appears limitation [periods, rather ][than ][adhering ][to ][the ][established legal] position. SLtch conduct .raises serious questions. about theadministrative efficiency and therespecr lbr judicialpronouncelllents, particularly rvhen this court has alrr:rrclv provideda balanced approach by preserving both the Revenue,s rights an<Jassesses intcrests position. SLtch conduct .raises serious questions. about theadministrative efficiency and therespecr lbr judicialpronouncelllents, particularly rvhen this court has alrr:rrclv provideda balanced approach by preserving both the Revenue,s rights an<Jassesses intcrests 13. Another. aspect which needs to be considered is that in fact itshould have been realized by the Income Tax Department itself andshould have lound out via media in ensuring that 1;r.oceedingsunder Sections l4g_A and l4g should not have been issued in afaceless manner! at least till the Ilon,ble Supreme Courl decide thetwelve hundr.ed (1200) odd SLps which it is already sei.zed of or., atleast the Incotle Tax Dspsltllgnt shou ld have fbun<l out someremedial steps to ensure that wherever the authorities intend toinitiate proceedings under Sections I 4g_A and 14tj, othr:.. than in afaceless manner, the proceedings should have been deferredwithout precipitating the matter further intimating the assessee thatthey shatl initiate appropriate proceedings onry after the rj,-p,s aredecided by the Hon,ble Supreme Court on the very sarne issue.This again, the Income Tax Department, has not been able to give aconvincing repl1,, except for the fact that such a decisio.n if at all has to be taken, has [to ][be taken ][for ][thq 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 ][Deparlment ][contended ][that]the Delhi High Court [dismissed ][a ][writ ][petition ][of ][similar ][nature, ][on]the one hand when [the High Courl ][is ][struggling ][to ][reduce ][its]pendency, such notices [which ][are ][under ][challenge ][in ][this writ]petition are forcing the [assessee ][to ][kriock the doors ][of ][this ][High]in [filing ][of ][hundreds ][of ][new ][writ ][petitions ][which in]Court resulting 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 belbre the Hon'bte [Supreme ][Courl having ][been taken on]the [Hon'ble ][Supreme ][Court ][which ][is seized ][of ][the]many occasions, matter has been reluctant [in ][granting any ][interim ][protection ][to ][the]lncome Tax Department. [Yet, ][the ][authorities ][concerned ][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 ][148-4 ][and] i48 tluough the jurisdictional Assessing Officer wl-ereas it oughtto have been only in the faceless manner 14. In the case ol BANK OF INDIA vs. ASSISTANT i48 tluough the jurisdictional Assessing Officer wl-ereas it oughtto have been only in the faceless manner 14. In the case ol BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXI I. on an lssue urhether it wasj usti fiableonthe part of the IncomeTax Deparlment in notfollowing an order passed by the adjudicating authority only on theground that tlie following an order passed by the adjudicating authority only on theground that tlie appeals are pending, the Division Eier.rch of theHigh Courr ol Bombay held at paragraph No.25 as und,:r, viz., :"25. Mr. [paridwalla ]ha''nnt'' [drawn ][out ][attentior ][to ][the]decision of this court ,n High Courr ol Bombay held at paragraph No.25 as und,:r, viz., :"25. Mr. [paridwalla ]ha''nnt'' [drawn ][out ][attentior ][to ][the]decision of this court ,n c odava ridevi Sara 11 2 as "o,t l:T:",::::,' :::::]T';""::ordinate Bench of this Courtin samp Furniture (P) Ltd' v' lro13of which one of us (Justice c the co urt caresorica rry " [rJ ][;":'ll:l^lr::"1lTT: ]i[" :"Jl:T:",::::,' :::::]T';""::ordinate Bench of this Courtin samp Furniture (P) Ltd' v' lro13of which one of us (Justice c the co urt caresorica rry " [rJ ][;":'ll:l^lr::"1lTT: ]i[" :"Jthe same "accepted,, the is set judgment of aside ,n ,,'u ttHigh court wourd not mean that till" bindins rorce Rererring," ff:::::,,":*i-;l;::: l:ffi :" bindins rorce Rererring," ff:::::,,":*i-;l;::: l:ffi :Union of lndia vs. Kamlakshi Finance Corporation Ltcl.r4, theKamlakshi Finance Corporation Ltcl.r4, theCourt observed that the approach of the officials of Revenue oftreating decisions being ,,notsupreme court. ," ,d o.,1,li^"jt1:1," [*"' ][criticized ][hv ][the]are the rerevanttreating decisions being ,,notsupreme court. ," ,d o.,1,li^"jt1:1," [*"' ][criticized ][hv ][the]are the rerevantobservations made by the .rr:il'::":j"wing .rr:il'::":j"wing lj I{1q1:,.1t, [,axmann.corn 422 ]rBonbay)l;;i]e18t [r ][I] ][rrR ][58e ][1se.6,r,] '.'.120241 165 taxmann.com o :7t oozj",;; ;;, ;l;'Jl',9H?ST o :7t oozj",;; ;;, ;l;'Jl',9H?ST ' 452 (Bombav) "6. 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]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 principies ][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] rule is not followed, the result will only be un,lueharassment to assesses and chaos in administrarionof tax laws 12. We have dealt with thisbecause it has been .rrrI::t; Tl"":?:IAdditional Solicitor General that the observationsmade by the High Court, have been harsh on t1eofficers. lt is clear that the observations of the Hir;hCourt. seemlngly vehement, and apparen:lyunpalatable to the Revenue, are only intended to cu.ba tendency in revenue matters which,if allowed iobecome widespread, could result inconsiderab eharassment to the assesses-public without any bener,itto the Revenue. We would like to say thatthedepartment should take these observations intheproper spirit. The observations of the High Courlshould be kept in mind in future.and the utmost reganj' " [Er{dt ][s& ]rL Slfi-o?| Ina [rarybp,ulrg+;t6#ffi;Yfiil, ]" [n, ][.,, ][n.,]appellate authorities to the requirements of judicialdiscipline and the need for giving effect to the orders,of the higher appellate authorities whrch are bindinc j-,ff*F. *g=i.. . inumhe on therl. " 15. What is worrying this Bench more is the fact that anendeavour is being made whole heartedly to ensure not k) generatefurther litigation on issues which have been laid to rest by a [argenumber of High Courts all of whom have taken a consistent standthat the action of the Income Tax Department being violatu,e of the1 1 Finance Act,2020 [and ][Finance ][Act,202l. ][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 Courl in ][the ][case ][of]Kankanala Ravindra [Reddy ][(1 ][supra) ][shall however ][be subject ][to]the outcome of the [SLPs ][which ][were ][filed by ][the ][Income ][Tax]Department and [which ][is pending consideration before ][the ][l{on'ble]Supreme Court. 16. 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 ][Coutl]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 ][other.wise can ][be ][decided]and disposed of [as a ][covered matter.] \7 . So far as the interest [of ][the ][Revenue is concemed, ][we ][are ][of]the considered opinion [that the ][interest ][ofthe ][Revenue has ][already]been considered and [protected, ][as has ][been observed ][in ][paragraphs] ., ii:i€actBnlB*rq*F: .3 ,,36,37^and\S.6Ttf ,36,37^and\S.6Ttf E"BfBE.fl \*ifiBilT'fl [,rdldy?gfe*dg.,ig]IICFCreproducedhereunderreproducedhereunder 36 For all the aforesaid reasons, the impugned r oticesissued and the proceedings drawn by the respondent_Department is neither tenable, nor sustairable.The notices so issued and the procedure adopteci betnoper se illegal, deserves to tand are accordinr,ly setaside/quashed. o. " "on."'u orders setting quashed, ,n" ::#::l::::by the respondent-Department pursuant ":;.";"r:":: to the r6rti6g5issued under Section 147quashed and it is o,.o.*o "#ollTT[ ,:,::;,1:are quashing the consequential order is on the principlesthat when the initiation of the proceedings itself wasprocedurally wrong,the subsequent orders also getsnullified automatically. 37. The preliminary objection raised by the petitionr__r issustained and all these writ petitions stands allowecl onthis very jurisdictional issue. Since the impugned notrcesand orders are getttng quashed on the point ofjurisdiction, we are not inclined to proceed further r:nddecide the other issues raised by the petitioner wl ichstands reserved to be raisedand contended in anappropnate proceedings. 37. The preliminary objection raised by the petitionr__r issustained and all these writ petitions stands allowecl onthis very jurisdictional issue. Since the impugned notrcesand orders are getttng quashed on the point ofjurisdiction, we are not inclined to proceed further r:nddecide the other issues raised by the petitioner wl ichstands reserved to be raisedand contended in anappropnate proceedings. JOSince the Hon,ble Supreme Court had, in the ce seof AshishAgarwal, supra, as a one{tmemeasLlreexercisingthe powers under Article 142of tieConstitution of India, permitted the Revenue toprOCC:rtdunder the substituted provisions, and this Court allowjDgthe petitions onlyon the procedural flaw, the ri,lht ., conferred on the [Revenue ][would ][remain ][reserved to]proceed further if they so [want ][from the ][stage of ][the]order of the Supreme [Court ][in ][the ][case ][ofAshish]Agarwal, supra. 18. We would only [further ][like to ][make ][observations ][that ][since]we are inclined to dispose [of ][the instant ][wlit ][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 ][Courl ][in ] [No'3574 ][of ][2024']preferred by the [lncome Tax ][Department, ][we ][make ][it ][clear that]allowing of the [instant ][writ ][petition ][is ][subject ][to ][outcome ][of ][the]aloresaid SLP [preferred ][by ][the ][Revenue ][against ][the ][decision ][of ][this]High Court in the [case ][of ][Kanakala Ravintlra ][Reddy ][(1 ][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]wl.it petition in the [light ][of ][the ][decision ][of ][the ][Hon'ble ][Supreme]Court in the [pending SLP ][on ][the ][very ][same issue'] 19. Accordingly, [the ][instant ][writ ][petition ][stands ][allowed]1nISfavour of the assessee [so ][far ][as ][the ][issue ][of ][jurisdiction]concerned. As. a [consequence, ][the ][impugned ][notice ][under]under [Sections ][148-4 ][and ][148 ][stands ][set ][aside/quashed']challenge (( \ The consequential orders, if any, also stand set aside/quashed insimilar ter,s as have been passed by this High courr in the case of Kankanala Rnvindra Reddy (l supra). There shall be no order asto cosLs Consequently, miscellaneous petitions pending, i I an1,, shall stand closed SD/- M. NAGAMANISGISTRAR//TRUE COPY//\1T11:Si:CTION OFFICER To1. The lncome Tax Officer, Ward .1Sangareddy lneTax [r:)ffice,]Veerabhadra Nagar, New Bus Stand, VeerabhadNagar, Siangareddy,Telangana-502001 Telangana State1. The lncome Tax Officer, Ward .1Sangareddy lneTax [r:)ffice,]Veerabhadra Nagar, New Bus Stand, VeerabhadNagar, Siangareddy,Telangana-502001 Telangana State State2. The Principal Chief Commissioner of lncome Tax, Telangan,a and A.p,Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabatl - 500 028,TelanganaHyderabad, lT Towers, AC Guards, Masab Tank, Hyderabatl - 500 028,Telangana 3. The National Faceless Assessment Center, lncome Tax Defrartment, NewAssessment Center, lncome Tax Defrartment, NewDelhi.4The Chairman, Central Board of Direct Taxes, Department of Revenue,Ylliltry [of ][Finance, Government of tndia, ]Siir"tiiiii'arirdings, New Dethi -110001.Ylliltry [of ][Finance, Government of tndia, ]Siir"tiiiii'arirdings, New Dethi -110001.5The. Secretary to the Government, Union of lndia, Department of Revenue,I\rlinistry of Finance, New Delhi - 1 [.10 ]OO1 .I\rlinistry of Finance, New Delhi - 1 [.10 ]OO1 .67One One CC CC to SRt to N4s. J.SUN|THA THANNERU.CHATTANV_A (JUNtoR SC FOR rr.rdiirrrre KUA/AR, Advocate [OpUC]TAx:).Adv;;;retoPUCltoPUCl8One CC to SRI GADI PRAVEEN KUMAR, DEpUTy SOLtctTOR GENERALOF lNDlA, Advocate (OPUC)OF lNDlA, Advocate (OPUC)ITwo CD Copies SA GJP HIGH COURT D.ATED:01 !0512025 ORDER WP.No.31476 ot 2024 ALLOWING THE W.PWITHOUT COSTS.