Wp/32124/2024 Of Primary Agricultural Cooperative Credit Society Limited v. The Income Tax Officer

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special origindl Jurisdiction) THURSDAY, THE FIRST DAY OF MAYTWO THOUSAND Ai'lD TWENTY FIVE PRESENTTHE HONOURABLE SRI JUSTICE P.SAM KOSHYAND THE HONOURABLE SRI JUSTICE NARSING WRIT PETITION N:32124 OF 2024 Between: PRIMARY AGRICULTURAL COOPERATIVE [LIMITED,]PAPANNAPET, Rep. by the Secretary [KUMAR, ][Sio V ][R]THIRUNAGARI, Aged about 42 [years, ]Occupation [Business, ][R/o ][PAPANNAPET,]MEDAK 502303, Telangana, lndia. PAN , [Assessment Year 2018-19] .....PETITIONER AND '1 . The lncome Tax Officer, Ward 1, Sangareddy lncome Tax Office,Veerabhadra Nagar, New Bus Stand, Veerabhadra Nagar, Sangareddy502001 , Telangana.Veerabhadra Nagar, New Bus Stand, Veerabhadra Nagar, Sangareddy502001 , Telangana. 2. The Principal Chief Commissioner oi [lncome ][Tax-Telangana ][and ][A.P,]Hyderabad, lT Towers, AC Guards, ivlasab Tank, Hyderabad [-500028,]Telangana.Hyderabad, lT Towers, AC Guards, ivlasab Tank, Hyderabad [-500028,]Telangana. 3. The Central Board of Direct Taxes, Represented by [its ]Chairman, [Department]of Revenue, Ministry of Finance, Government of lndia, Secretariat [Buildings,]New Delhi - 110 001,of Revenue, Ministry of Finance, Government of lndia, Secretariat [Buildings,]New Delhi - 110 001, 4. The National Faceless Assessment Oenter, [lncome ]Tax [Department, ][t'lew]Delhi.Delhi. 5. The Union of lndia, Represented by lts Secretary [to the ][Govemment,]Department of Revenue, Ministry of Finance, New Delhi [- ]110 001.Department of Revenue, Ministry of Finance, New Delhi [- ]110 001. .....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 lo issue an appropnate writ, order or [direction more particularly ]one [in]the nature of Writ declaring the order passed by the income tax^/andamus, -f authorities [National Faceless E-Assessment ][Centre ][completed ][the ][assessment]UIS 1.47 [r.w.s 144 ][read ][with ][section ',l448 ][Dale ][of ][16-01-2024, ] tTBtuAST/S/14712023-24110597 [71015(1) ][for ][the ][Ass;essment ][Year ][2018-19]determining the total income of Rs. 5,20,87,901/- [as ][arb,itrary, ][illegal, bad ][in ][law,]without [jurisdiction, ]void-ab-initio, violative of the [principles ]of natural [justice ]apartfrom being violative of Articles 1a, [1 ]9(1 )(g) and 265 of the Constitution of lndiaand Sec. 148A of the lncome Tax Act, 1961, and consequently [set ][aside ][the]same in the interests of [justice.] |.A.NO:1 OF 2024 Petition Under Section 151 CPC praying that in thr: circumslances stated inthe affidavit filed in support of the petition, the High [()ourt ]may be [pleased ][to]suspend the order Under section 147 r.w.s 144 rcad with section [1448 ][Date ]of16-01 -2024, DIN ITBA/ASTlsll 47 12023- 241 105977 [1O1 ]5(1 ) [for ]the AssessmentYear 2018-19 determining the total income of Rs. 5,210,87,9011 and Demandnotice u/s 156 of the lncome Tax act 1961, vde DIN & Notice [No]ITBA/AST/S/15612023-24110 59771 106(1) Dt 16-01-2)24 for the assessmentyear 2018-19 pending disposal of the above writ petition. Counsel for the Petitioner : SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1 & 2 : Ms- J.SUNITHI\ [(JUNIOR ]SC FORrNcoME TAX) Counsel for the Respondent Nos.3 to 5 : SRI GADI PRA,VEEN KUMAR, DEPUWSOLICITOR GENERAL OF INDIA The Court made the following ORDER THE HONOURABLE SRI JT,ISTICE P.SAM KOSHYANDTHE HONOURABLE SRIJUSTICE NARSING RAONANDIKONDA WRIT PETITION No.32124 of2O24 GDEB, [(per ][Hon'ble ][Sri ][Justica ][P.Sam ][Koshy)] Heard Mr. T.Chaitanya Ku6ar, learned counsel for [the]petitioner and Ms.J.Sunitha, learned Junior Standing Counsel forthe lncome Tax Department for the respondents. [Perused the]record. Counsel for the Petitioner : SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1 & 2 : Ms- J.SUNITHI\ [(JUNIOR ]SC FORrNcoME TAX) Counsel for the Respondent Nos.3 to 5 : SRI GADI PRA,VEEN KUMAR, DEPUWSOLICITOR GENERAL OF INDIA The Court made the following ORDER THE HONOURABLE SRI JT,ISTICE P.SAM KOSHYANDTHE HONOURABLE SRIJUSTICE NARSING RAONANDIKONDA WRIT PETITION No.32124 of2O24 GDEB, [(per ][Hon'ble ][Sri ][Justica ][P.Sam ][Koshy)] Heard Mr. T.Chaitanya Ku6ar, learned counsel for [the]petitioner and Ms.J.Sunitha, learned Junior Standing Counsel forthe lncome Tax Department for the respondents. [Perused the]record. 2. This is a writ petition wherp the proceedings are eitherchallenged to the notices which were issued under Section 148Aand 148 of the Income Tax Act, 1961 [(for ]short'the Act') or theassessment orders those have been passed under Section [147 ]ofthe Act which have been assailed. 3. This writ petition is being taktin up today only on one [of ][the]grounds, that the notices issued under Section 148,{ of the Actand the subsequent initiation ofprodeedings under Section [148 ]ofthe Act by the [jurisdictional ]Assessing Ofticer, [whereas ][in ][terms]of the amendment that was brought to the [Income ][Tax ][Act ][by ][way]of Finance Act, 2021 [r,,.e.t.. ]0t.0{.202 I [onwards, ][proceedings] under [Section ][148,{ ][of ][the ][Act ][as][ also under ][Section ][148 ][of ][the]Act [ought ][to ][have ][also ][been ][issued and proceeded ][in ][a ][faceless]manner.4. The [contention ][of ][the ][petitioner ][is ][that the ][issue ][of]proceedings [being ][in ][violation ][of ][the ][Finance ][Act' ][2021 i ][e ][' ][the]impugned [notices ][under Section 148A ][and ][Sect.ion ][148 ][of ][the Act]not being [issued ][in ][a ][faceress ][manner, ][have arready ][6"sn ][dg2[t ][rvith]and [decided ][by ][this ][Court ][in ][the ][case ][of ] RAVINDRA [vs' INCOME-TAX ] [decided]on 14.09.2023whereby [a ][batch ][of writ ][petitions were allowed ][and]the proceedings [initiated ][under Section ][148,4 ][e's ][also undcr ][Section]148 of [the ][Act ][were held ][to ][be ][bad ][with ][consecluential ][reliels ][on ][the]ground [of ][it being in ][violation ][of ][the ][provisior's ][ol'section ] [5l ] [ol']the Act [read ][with ][Notification ][l}lzlz2dated ][l9 ][0l'2011 ]['thc ][said]judgment [passed ][by ][this ][Court ][has ][also ][been ][subscque ][ntl'v ][tollou'ed]in a large [number ][of ][writ ][petitions ][which ][were ][allorved ][on ][sirlilar]terms- ,[(202]) 156 taxmann com [178 ][(Telangana)l] <--."" 5. Down the line, we find that the same issue has also [been]decided against the Revenue byvanous High Courts i.e.,by the Bombay High Court in the case of HEXAWARETECHNOLOGIES LTD., vs. ASS|STANT COMMISSIONEROF INCOME TAX & OTHERS2, Gauhati High Court [in ][the ][case]of RAM NARAYAN SAH vs. UNtrON OF [INDIA3, ][Punjab ][and]Haryana High Court in the case of JATINDER SINGH BANGUvs. UNION OF INDIA4, and Telangana High Court in the case ofSRI YENKATARAMANA REDDY PATLOOLA [VS. ] COMMISSIONER OF INCOME TAX5 where the issue [was ][in]respect of intemational taxation, eorilUay High Court in [the ][case ]ofABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICER'INTERNATIONAL TAXATION6 which is again on internationaltaxation and central circle, High Court of Himachal Pradesh in thecase of GOVIND SINGH ns. li.lcorrle TAx oFFICERT,Gujarat High Court in the casc of' MANSUKHBHAI '1zoz+1464 [430 ][(Bom)]' [(2024) [56 ][taxmann.com 478 ][(Gauhatti) ]|'[(2024) 165 taxmann.com I l5 (Punjab & I laryana)]'L2024) [167 ]taxmann.com [4l ] [( ][l'clangana)l] " 12024) [166 ]taxmann.com [679 ][(Bonrba;v ])l ' 12024) 165 taxmann.com I l3 (Hinrachul Pradesh)l '1zoz+1464 [430 ][(Bom)]' [(2024) [56 ][taxmann.com 478 ][(Gauhatti) ]|'[(2024) 165 taxmann.com I l5 (Punjab & I laryana)]'L2024) [167 ]taxmann.com [4l ] [( ][l'clangana)l] " 12024) [166 ]taxmann.com [679 ][(Bonrba;v ])l ' 12024) 165 taxmann.com I l3 (Hinrachul Pradesh)l DAHYABHAI [RADADIYA vs. INCOME ]['ltAX ][OFFICER']WARD 3(3)(5)8, [Jharkand ][High ][Court ][in ][the ][case ][of ] SUNDAR SAW [vs. ] [INDIAe, ][Rajasthan ][High ][Court ][in]the case of SHARDA [vs' ] OFFICER & [and ][batch ][of writ ][petitions'o which]stood decided on [19.03.2024. ][Similar ][views ][ha'r'e ][also ][been taken]the Division [Bench ][of ][Calcutta ][High Court ][in ][the ][case ][of]by GIRDHAR GOPAL [DALMIA vs.IINION ] [& ] (M.A.T 1690 of 2023), decided [on25-09.2024']6. Even though the [same issue ][having ][been ][decided ][by a ][large]nurnber of High Courts, [we ][are ][still ][confronted with ][large ][filing ][ol]identical matters on [daily ][basis ranging ][betr:r'een ][5 ][to ][l0 ][writ]petitions. That upon the [instructions ][being ][sought ][ttorn ][the]Departrncnt, they [have ][been ][taking ][a ][solitary ground ][that ][the]decision of the Bombay [High ][Court ][in ][the ][r:ase ][of ][Hantworc]Technologies Ltd., [(2 ][supra) ][as ][also ][the ][one ][which ][has ][been]dccided by this Court in [the ][case ][of ][Kanakalu Rsvindrfl ][Redd.r] 8202+ scc onl-ine Guj 4012" [1025 ] [Online ][Jhar 287]oJ2o23, R.t-JD:4984-DBi' ' (l supra) has been subjected to challenge in a Special LeavePetition i.e., SLP No.3574 of 2024 before the Hon'ble SupremeCourt and the Hon'ble Supreme Court is seized of the matter.In addition, there are about 1200 SLPs also filed arising out of thesame issue being decided by various High Courts. l. To a query being put to the learned counsel for the Revenue,they have categorically accepted thq fact that there is no interimorder granted by the Hon'ble Suppeme Court in any of thesematters pending before it. Meanvyhile, fresh writ petitions o fidentical nature are being piled up before this Bench on daily basisand the pendency is getting increasgd on matter which otherwisehas already been dealt and decided by this very High Court itself. 8. On the one hand, even though the order ol this Court thatrvas passed as early as on 14.09.2023 and more 16 rnonths haveIapsed, till date, we do not find an| remedial steps having beentaken by the Income Tax Departmerit to take appropriate sreps toeither hold back issuance of notice qnder Section l48A and underSection 148 of the Act by the jurlsdictional Assessing Officcr,rather the authorities concemed in tllre teeth of series ol decisions by all the major [High ][Courts ][in ][India ][are ][continuously still]initiating proceedings [under Section ][l48A ][of ][the ][Act ][and ][also]initiating proceedings [under ][Section ][148 ][of ][the ][Act ][in]contravention to the [amendments ][brought into the ][Income ][Tax ][Act]pursuant to the F inance Acl, [2020 ][as also ][the ][Finrmce ][Act ][2021 ][.] 8. On the one hand, even though the order ol this Court thatrvas passed as early as on 14.09.2023 and more 16 rnonths haveIapsed, till date, we do not find an| remedial steps having beentaken by the Income Tax Departmerit to take appropriate sreps toeither hold back issuance of notice qnder Section l48A and underSection 148 of the Act by the jurlsdictional Assessing Officcr,rather the authorities concemed in tllre teeth of series ol decisions by all the major [High ][Courts ][in ][India ][are ][continuously still]initiating proceedings [under Section ][l48A ][of ][the ][Act ][and ][also]initiating proceedings [under ][Section ][148 ][of ][the ][Act ][in]contravention to the [amendments ][brought into the ][Income ][Tax ][Act]pursuant to the F inance Acl, [2020 ][as also ][the ][Finrmce ][Act ][2021 ][.] g. 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 ol Kanakala [Ravindrs ][Reddy ][(l ][supra'l, ][leamed ][Standing]Counsel lor the Income [Tax ][Department ][contencls ][that ][those ][would]unnecessarily burden [the ][Income ][Tax ][Department ][where ][they]would be lcquired to file equal [number ]of [SLPs before ][the]Hon'ble Supreme Court [and ]it [would ][be ][further ][burdening ][the]exchequer ol'thc Union [of India. ][It ][was ][also ][the contention ][of ][thc]learned Stancling Counsel [that ][no ][prejudice ][would ][be ][caused ][to ][the]intercst of thc [petitioners in ][case ][if ][this ][writ ][petition ][is ][kept pending]till the llnalization ol the [SLPs ][pending br:fore ][the ][Hon'ble]Court [and ][the ][fact ][that the ][petitioner ][is ][already ][enjoying]Suprerne the benclit [of- ][interim ][protection. ][Nonetheless, ][r>n ][the earlier ][query]of this Courr as [to why ][the Income ][Tax ][Department have not ][comc]out with a mechattistn [1o issue ][appropriate ins'fructions ][or ][to ][takc] appropriate steps in ensuring that pfoceedings under Section l48Aof the Act as also the ass€ssrnent orders under Section 148 of theAct are kept in a hold in the light ofthe decisions dedcided by thevarious High Courts, it was submitted by the leamed StandingCounsel that the said steps can onlyl be taken at the level of CBDTas any such steps would have to be taken Pan India and cannot belimited to any of these jurisdictional High Courts. 10, As a result of which, what w$ are facing is steep increase oflitigation day in and day out even ttlough various orders have beenpassed by this High Court allowing tvlTit petitions on the very sameissue. I'he Income Tax authorities qoncemed are still even now in2025 also initiating proceedings in pontravention to the provisionsof Section I 5 I A of the Act and as a result by now, more than 600to 700 pctitions have been already got piled up before this High('oLu1 on an issue which otherwise Ftands squarely covered by thejrrdgment of this Court in the case of Kanaksla Ravindra Redd_1,( I supra). What is also surprising is the fact that though whileallorving the writ petitions in the case of Kanakslt RavindraRctldy (l supra), the Division BenQh while reserving the right olthc Revenue, has also protected the interest of the petitioners insofar as the liberty wh ich was granted to the Revenue forinitiating fresh proceedings strictly in accordance with the amendedinitiating fresh proceedings strictly in accordance with the amendedprovisions of the Act, as amended by the Financ e Act, 2020 andthe Finance Act,202l . The petitioner assessee wtuld be entitled tochallenge or raise the other legal objections if the Revenue initiatesfresh proceedings. The Department has made no endeavour inavailing the said riberty that was reserved for the Revenue. on thefresh proceedings. The Department has made no endeavour inavailing the said riberty that was reserved for the Revenue. on thecontrary, they have been stil sticking on to the stand, which thisHigh Court as well as nrany other High Courts already held to beHigh Court as well as nrany other High Courts already held to be bad I1. It appears rhar because ofthe aforesaid libelty that this HighCourt had granted perrnitting the Revenue for initiating freshproceedings as a one-trme lreasure in a faceklss manner, theIncome Tax l)epartrnent wants to take advantage of the same byprotracting thcse procecdings which would enable them to meet thelimitation that rvould otherwise coure in the way. Likewise, if thewrit petition is kept pending lbr a considerable long period of timeand finally at a latcr stagc if rhe Hon,ble Supreme Court confirmsthe decision taken hy rhis High Court as also by the other HighCourts in which the SL.ps are sti[ pending, the Income Tax Department would get the advantage of the liberty that is otherwiseprotected in favour of the Revenue for initiation of freshproceedings from the disposal of thgse matters at a much later stagewhich would be advantageous and beneficial to ttre Revenue andwould be equally disadvantageous and dekimental so far as interestof the assesses are concemed. As a consequence, the Income TaxDepartment gets an extended perio{ of time for initiation of freshproceedings. 12. The alarming trend of docket pxplosion in this Court, despitethe clear precedent set in Kanakala Ravindra Reddy ( I supra), is anlatter ol grave concem. The Incorne Tax Department's persistenti n i tiation o t' ticsh proceedings, disregarding the established j ud ic ialpronou ncernents, has led to an unprecedented surge in litigationrvith or,er 600-700 petitions piling up on the same issue. Thistlcliberate approach not only under;nines the principle of judicialprecedent but also strains the judicial resources unnecessarily. TheDcpartnre nt's strategy of awaiting the Supreme Court's decision onpcnding S[.[)s rvhile continuing [o initiate fresh proceedingsappcars to be a calculated move to buy time and circumventlinritation periods, rathcr than adhpring to the established legal position. Such conduct [raises serious ][questions ][about ][the]administrative efficiency [and ][the ][respeot ][for ][judicial]pronouncements, particularly [when this ][Court ][has ][already provided]a balanced approach by [preserving both the ][Re'venue's ][rights ][and]assesses interests. position. Such conduct [raises serious ][questions ][about ][the]administrative efficiency [and ][the ][respeot ][for ][judicial]pronouncements, particularly [when this ][Court ][has ][already provided]a balanced approach by [preserving both the ][Re'venue's ][rights ][and]assesses interests. 13. Another aspect [which ][needs ][to ][be ][considered ][is ][that in fact ][it]should have been [realized by ][the ][Income ][Tax Dellartment 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 ][teast ][till ][the ] [ton'ble ][Supreme ][Court ][decide the]twelve hundred [(1200) odd ][SLPs ][which ][it ][is ][already ][seized ][of ][or, ][at]least the Income Tax Dcpartment [should havt: ][found ][out ][some]remedial steps to [ensurc ][that ][nherever the authorities intend ][to]initiate proceedings under [Sections 148-A ][and ][148, ][other than in ][a]faceless manner, thc [procecdings ][should have ][been ][deferred]without precipitating the [matter ][turther intimatirrg ][the ][assessee ][that]they shall initiate appropriate [proceedings ][only ][rfter ][the SLP's ][are]decided by the Hon'ble Supreme [Court ][on tho very ][same ][issue.]This again, the Income ['['ax Depanrnent, ][has ][not ][been able ][to ][give ][a]convincing reply, except [fbr ][the lact ][that ][such ][a decision ][if ][at all] ) has to be taken, has to be taken fop the whole of India, and whichotherwise has to be by way of a pqlicy decision and that too at thelevel of Central Board of Direc{ Taxes. Though the leamedStanding Counsel for the Income ['lfax ]Department contended thatthe Dethi High Court dismissed a writ petition of similar nature, onthe one hand when the High Cqurt is struggling to [reduce ][its]pendency, such notices which arB under challenge in this writpetition are forcing the assessee tp knock the doors of this HighCourl resulting in fiting of hundreds of new writ [petitions ][which ][in]the long run not only alfects the disposal of the writ petitions butalso consurnes substantial time 0f the Bench in hearing thesematters again and again on daily bpsis. Admittedly, in spite of [the]matter belore the Hon'ble Supree Court having been taken onmany occasions, the Hon'ble Suprqme Court which is seized [of ][the]matter has been rcluctant in grantipg any interim [protection ][to ][the]lIncome Tax L)epartrrcnt. Yet,the lauthorities concemed at theState level are not ready to accept ithe [verdict ][passed ][by ][a ][majority]ol High Coufts of dit-tbrent States on the same [issue; and ][to ][make]things iurther rvorse, the lncomp Tax Department [is ][showing]audacity' by issuing notices continqously [under Sections ][148-4 ][and] 148 through the [jurisdictional ][Assessing ][Officelwhereas ][it ][ought]to have been only [in ][the faceless manner.] 14. In the case of [vs' ] COMMISSIONER, [TAX1r, ][on ][an issue ][whether ][it ][was]justifrable on the part of the Income [Tax ][Department ][in ][not]an order [passed ][by ][the ][adjudicating auttrority ][only ][on the]following ground that the appeals [are pending, ][the Division ][Bench ][of ][the]High Court of Bombay [held ][at ][paragraph ][No.25 ][asr ][under, ][viz', ][:] 148 through the [jurisdictional ][Assessing ][Officelwhereas ][it ][ought]to have been only [in ][the faceless manner.] 14. In the case of [vs' ] COMMISSIONER, [TAX1r, ][on ][an issue ][whether ][it ][was]justifrable on the part of the Income [Tax ][Department ][in ][not]an order [passed ][by ][the ][adjudicating auttrority ][only ][on the]following ground that the appeals [are pending, ][the Division ][Bench ][of ][the]High Court of Bombay [held ][at ][paragraph ][No.25 ][asr ][under, ][viz', ][:] "25. Mr. Paridwalla has rightly [drawn ][out ][at:ention ][to ][the]decision of this [Court in ][Commissioner ][of ][lncome ][Tax ][vs' ][Smt']Godavaridevi Sarafl2 [as ][also ][the ][recent ][declsi()n ][of ][the ][co-]ordinate Bench [of this Court in ][Samp ][Furniture ][(P) ][Ltd' ][v' ][lTOl3]of which one [of us ][(Justice ][G.S. ][Kulkarni) ][was ][a ][member, wherein]the Court categorically [observeo ][that the ][Revenre ][having ][not]"accepted" the [judgment ]of the [High Court ][would ][n()t mean ][that ][till]the same is set [aside ][in ][a ][manner ][known ][to ][law, it'ryould loose ][its]binding force. [Referring ][to the ][decision ][of the ][Supreme Court ][in]Union of lndia vs. [Kamlakshi ][Finance ][Corporalion Ltd''1, ][the]Court observed that [the ][approach ][of the ][officials ][of ][Revenue ][of]treating decisions being ["not ][acceptable" ][was ][criticrzed ][by ][the]Supreme Court. ln [such ][declsion, followrng ][ar3 the ][relevant]observations made [by ]the [Supreme Court] r' 112025; 170 taxmann.com 422 (Bomba) )l112025; 170 taxmann.com 422 (Bomba) )l t2 1t9781 113 ITR 589 (Bombay) " IZOZ+1165 [taxmann.com 581/300 Taxnian 451 ][(tlombay)]to lgezltaxmann.com 16/55 ELT 113 (SC) ( (4, il r' 112025; 170 taxmann.com 422 (Bomba) )l112025; 170 taxmann.com 422 (Bomba) )l t2 1t9781 113 ITR 589 (Bombay) " IZOZ+1165 [taxmann.com 581/300 Taxnian 451 ][(tlombay)]to lgezltaxmann.com 16/55 ELT 113 (SC) ( (4, il "6. Sri Reddy is perhaps rlghtin saying that tfleofficers were not actuated, byIany mala fides inpassing the impugned ordersThey perhapsgenuinely felt that the claim Of the assessee was nottenable and that, if it was accepted, the Revenuewould suffer. But what Sri Rqddy overlooks is that weare not concerned here with the correctness orwould suffer. But what Sri Rqddy overlooks is that weare not concerned here with the correctness orotherwise of their conctusi[n or of afly factualmalafides but with the fact that the officers, in reachingin their conclusion, by-passed two appellate orders inregard to the same issue which were placed beforethem. one of the Coltector (Appeals) and the other ofthe Tribunat. The High Courtlhas, in our view, righflymalafides but with the fact that the officers, in reachingin their conclusion, by-passed two appellate orders inregard to the same issue which were placed beforethem. one of the Coltector (Appeals) and the other ofthe Tribunat. The High Courtlhas, in our view, righflycriticized this conduct of the issistant Collectors andthe harassment to the assessie caused by the failureof these offrcers to n,r" .ku", to the orders ofauthorities higher to them in thp appellate hierarchy. ltcannot be too vehemenfly errnphasized that it is ofthe harassment to the assessie caused by the failureof these offrcers to n,r" .ku", to the orders ofauthorities higher to them in thp appellate hierarchy. ltcannot be too vehemenfly errnphasized that it is ofutmost importance that, ih disposing of thequasijudicial issues before thei.n, revenue officers arequasijudicial issues before thei.n, revenue officers arebound by the decisions of thL appellate authorities.The order of the Appe te Collpctor is bindino on theAssistant Coltectors *ork,ng *lthrn nis lurisOiJtion andthe order of the Tribunal ,s Oinilng upon the AssistantCollectors and the Appeltate Collectors who functionunder the [jurisdrction ]ot the Tri[unal. The principles ofjudicial disciptine requrre that the orders of the higherAssistant Coltectors *ork,ng *lthrn nis lurisOiJtion andthe order of the Tribunal ,s Oinilng upon the AssistantCollectors and the Appeltate Collectors who functionunder the [jurisdrction ]ot the Tri[unal. The principles ofjudicial disciptine requrre that the orders of the higherappellate authoritres should bq followed unreservedlyby the subordjnate authorilies. The mere fact that theorder of the appellate authorit}1 is not [,,acceptable" ]tothe department - rn rtself an gbjectionable phrase -and is the sub1ect matter of anl appeal can furnish noorder of the appellate authorit}1 is not [,,acceptable" ]tothe department - rn rtself an gbjectionable phrase -and is the sub1ect matter of anl appeal can furnish noground for not foltowing it unjess its operation hasbeen suspended by a competent court lf this healthy rule is not followed, the [result ][will ][only ][be ][undue]harassment to assesses [and ][chaos ][in ][admilistration]of tax laws. rule is not followed, the [result ][will ][only ][be ][undue]harassment to assesses [and ][chaos ][in ][admilistration]of tax laws. 12. 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 [obseNatlons ][of the ][Hrgh]Cou(, seemingly vehement, [and ][apparently]unpalatable to the [Revenue, are only ][intend€rd ][to curb]a tendency in revenue matters [which, ][if ][allowed ][to]become widespread, could [result ][in ][cor ][siderable]harassment to the assesses-public [without ][a ][1y ][benefit]to the Revenue. We [would ][like ][to ][say that ][the]department should take [these ][observations ][in ][the]proper spirit. The observations of the [gh ][Court]should be kept in mind [in ][future ][and ][the utmost ][regard]should be [paid ]by the adjudicating [authorrties and the]appellate authorities to the [requirements ][)f ][judiciat]discipline and the need for [giving effect ][to ][the ][orders]of the higher appellate [authorities whrch ][are ][binding]on them." 15. 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 ][laitl ][to ][rest ][b)' ][a ][large]number of High Courts all of [whom ][havc ][taker ][a ][cotrsistetlt ][stand]that the action of the Income Tax Department [being ]'"iolative [of ][the] E= Finance Act, 2020 and Finance Agt, 2O2l . Now, in order to prot€ctthe interest of the Revenue as also that of the assessee, it would betrite at this juncture, if we dispose of the writ petition with anobservation/direction that the dispgsal of the instant writ petition interms of the judgment rendered bf, this High Court in the case ofKankanala Ravindra Reddy (1 sulpra) shall however be subject tothe outcome of the SLPs which ,were filed by the [ncome TaxDepartment and which is pending ionsideration before the Hon'bleSupreme Court. 16. In the given facts and circlrmstances, this Bench is of theconsidered opinion that unless and until we do not timely disposeof matters which are squarely coveped by the decision of this Courtand which stands fortified bv the decisions of the various otherHigh Courts on the very sanie is{ue. rhe pendency of this HighCourt would further be burdened Which otherwise can be decidedand disposed ofas a covered mattc4 17. So far as the interest of the (erenue is concemed, we are ofthe considered opinion that thc intejrest ofthe Revenue has alreadybeen considered and protected, as (as been observed in paragraphs 36,37 [and ][38 ][of ][the order ][which, ][for ready ][referen<:e' ][is reproduced] hereunder: 36. For all [the aforesaid ][reasons, ][the ][impugned notices]issued and the [proceedings ][drawn ][by ][the ][rospondent-]is [neither ][tenable' ][nor ][s ][rstalnable']Department The notices so [issued ][aM ][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 respondenlDepartment [pursuant ][to ][l:he 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. 37. The [preliminary objection raised ][by ][the ][petitioner ][is]sustained and [all these ][writ ][petitions ][stands ][allowed ][on]this very .iurisdictional [issue ][Since ][the ][impugned ][notrces]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 ][petilioner ][which]stands reserved [to ][be ][raised ][and ][contended ][in ][an]appropriate Proceedings. 38. Since the [Hon'ble ][Supreme Court ][hac ][in ][the ][case]of Ashish Agarwal, [supra, ][as ][a ][one-tinle ][measure]the [powers ][under ][Article ][1'12 ][of ][the]exercising Constitution [of ][lndia, ][permitted ][the ][Revenur: ][to ][proceed]under the [substituted provisions, and this Court ][allowlng]the [petitions ][only ][on the ][procedural ][flaw ][the ][rrght] confened on ttle Revenue would remain reserved toIproceed further if they so want from the stage of theorder of the Supreme Cpurt in the case of AshishAgarwal, supra. 18. We would only further likq to make observations that since we are inclined to dispose of the ilnstant writ petition, conscious ofthe fact that the earlier order ofl this High Court in the case ofKanakala Ravindra Reddy (1 strpra) is subjected to challengebefore the Hon'ble Supreme Court in SLP No.3574 of 2024,the fact that the earlier order ofl this High Court in the case ofKanakala Ravindra Reddy (1 strpra) is subjected to challengebefore the Hon'ble Supreme Court in SLP No.3574 of 2024,preferred by the Income Tax Department, we make it clear thatallowing of the instant writ petition is subject to outcome of theaforesaid SLP prefened by the Revenue againsr the decision of thisHigh Court in the case of Kanalpala Rnindra Reddy (l stpra).This, in other words, would meanl that either of thc parties, if theyaforesaid SLP prefened by the Revenue againsr the decision of thisHigh Court in the case of Kanalpala Rnindra Reddy (l stpra).This, in other words, would meanl that either of thc parties, if theyso want, may move an appropriatf petition seeking revival of thiswrit petition in the light of the dPcrsion ol the Hon'ble SupremeICourt in the pending SLP on the v rv same I ssue.fwrit petition in the light of the dPcrsion ol the Hon'ble SupremeICourt in the pending SLP on the v rv same I ssue.f 19. Accordingly, the instant writ petition stands allowed infavour of the assessee so lar as the issue ol' jurisdictionlsconcemed. As a consequencg, thc impugned notice underchallenge under Sections 148-4 and I48 stands ser aside/quashed. I( The consequential [orders, ][if ][any, also ][stand ][set ][aside/quashed in]similar terms [as ][have ][been passed ][by ][this ][Higlr ][Courl in ][the ][case ][of] Ksnkanala [Ravindra ][Reddy ][(1 ][supra)' ][There ][shall ][be no order ][as] to costs Consequently, [miscellaneous ][petitions ][pending, ][if ][any, ][shall] stand closed. SDIK.BHAVANI SWAMYASSIsTANT //TRUE COPY// ['\ ]\\\f'-i ['' ][s="''oN ][oFFlcER], \l To 1. The lncome Tax Officer, Ward 1, Sangareddy lncorht: Tax Office,Veerabhadra Nagar, New Bus Stand. Veerabhadra Nagar, Sangareddy502001 , Telangana.Veerabhadra Nagar, New Bus Stand. Veerabhadra Nagar, Sangareddy502001 , Telangana. 2. The Principal Chief Commissioner of lncome Tax-Tel,angana and A.P,Hyderabad, lT Towers, AC Guards, Masab Tank, Hyclerabad -500028,Telangana-Hyderabad, lT Towers, AC Guards, Masab Tank, Hyclerabad -500028,Telangana- 3. The Chairman, Central Board of Direct Taxes, Deparlment of Revenue,Ministry of Finance, Govemment of lndia, Secretariat Buildings, New Delhi [-]110001.Ministry of Finance, Govemment of lndia, Secretariat Buildings, New Delhi [-]110001. 4. The National Faceless Assessment Center, lncome T'ax Department, NewDelhi.Delhi. 5. The Secretary to the Govemment, Union of lndia, Department of Revenue,Ministry of Finance, New Delhi.Ministry of Finance, New Delhi. 2. The Principal Chief Commissioner of lncome Tax-Tel,angana and A.P,Hyderabad, lT Towers, AC Guards, Masab Tank, Hyclerabad -500028,Telangana-Hyderabad, lT Towers, AC Guards, Masab Tank, Hyclerabad -500028,Telangana- 3. The Chairman, Central Board of Direct Taxes, Deparlment of Revenue,Ministry of Finance, Govemment of lndia, Secretariat Buildings, New Delhi [-]110001.Ministry of Finance, Govemment of lndia, Secretariat Buildings, New Delhi [-]110001. 4. The National Faceless Assessment Center, lncome T'ax Department, NewDelhi.Delhi. 5. The Secretary to the Govemment, Union of lndia, Department of Revenue,Ministry of Finance, New Delhi.Ministry of Finance, New Delhi. 6. The Secretary to the Government, Union of lndia, Delrartment of Revenue,Ministry of Finance, New Delhi - 1 10 001 .Ministry of Finance, New Delhi - 1 10 001 . 7. One CC to SRI THANNERU CHAITANYA .KUMAR, Advocate 8. One CC to tv1s. J.SUNITHA (JUNIOR SC FOR INCOI/E TAX) AdvocateloPUCl8. One CC to tv1s. J.SUNITHA (JUNIOR SC FOR INCOI/E TAX) AdvocateloPUCl9. One CC to SRI GADI PRAVEEN KUMAR, DEPUTY I]OLICITOR GENERALOF lNDlA, Advocate (OPUC)OF lNDlA, Advocate (OPUC) 10.Two CD Copies SA GJP o IilIIII . HIGH COURTDATED:01 10512025 ORDERWP.No.32124 ot 2024 ALLOWING THE W.PWITHOUT COSTS. (oi\I2 3 AUE 2025I11,\..\i