Wp/34606/2024 Of Rajaboiena Vinay Kumar v. Income Tax Officer Ward 1

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD(Special Originat Jurisdiction)FRIDAY, THE TWENry FIFTH DAY OF APRILTWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHYANDTHE HONOURABLE SRI JUSTTCE NARSING RAO NANDIKONDA WRIT PETITION NO:34606 OF 2024 Between: Rajaboiena _Vinay Kumar, S/o Rajaboiena Srinivas, Aged about 34 years,Occupation.B-us-iness, H.No.3-62,- Gokul Nagar, Fatancheru, fu{edak,Telangana-5023'19. ...PETITIONER AND 1Income Tax Officer Ward 1, Sanga Reddy, lncome Tax Office, VeerabhadraNagar, New Bus Stand, Sanga Reddy, Telhngana-50200i.Nagar, New Bus Stand, Sanga Reddy, Telhngana-50200i. 2The.Principal Chief Commissioner of lncome Tax Ap and TS, 1Oth Floor, C-Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004.Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 3. The Assessment Unit, lncome Tax Department, National FacelessAssessment . [Centre, ][Delhi, ][Ministry ][of ][Finance, ][Room No. ][4O1, ][2nd ][Floor, ] Assessment . [Centre, ][Delhi, ][Ministry ][of ][Finance, ][Room No. ][4O1, ][2nd ][Floor, ] Ramp, Jawaharlal Nehru Stadium,'Delhi-1 1 0003. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High Court may bepleased to issue an appropriate writ order or direction more particularly one inthe nature of Writ of Mandamus, declaring the Assessment Order dt.22.03.2024the nature of Writ of Mandamus, declaring the Assessment Order dt.22.03.2024passed by the 3rd respondent uis 147 r.w.s 1448 of the lncome{ax Act for A.y.2O1 5-16 vide DIN No. ITBA/ASTlsl 1 47 12023-2411 0631 95450(1 ), consequent tothe order passed u/s 14BA(d) dt. 07.04.2022 vide DIN No.ITBA/ASTi Fi 148N2022-2311042597049(1) and the notice uis 148 dt. OZ .04.2022vide DIN No. ITBA/ASTlSll4B_112022-23|1042609096(1), issued by the JA0(1strespondent) instead of FAO(3rd respondent), and consequential penalty ordersthe order passed u/s 14BA(d) dt. 07.04.2022 vide DIN No.ITBA/ASTi Fi 148N2022-2311042597049(1) and the notice uis 148 dt. OZ .04.2022vide DIN No. ITBA/ASTlSll4B_112022-23|1042609096(1), issued by the JA0(1strespondent) instead of FAO(3rd respondent), and consequential penalty orderspassed vide order u/s 271(1)(c) of the Act dt. 05.09.2024, order u/s 271(11(b) ot the Act dt. 05.0l.il02r [order u/s ][271F ][oI ][the Act dt. ][o5.o{1.2024. ][rrder ][uls271A]oftheActdt'0(),O9il|24andorderU/S271lc-oftheActdt.09,01]2024,asvoid,illegal,andcortrilli.ctheprovisionsoflncome-taxAr:'tandccntrarytothePrinciples of Natura [J.rstice.] IA NO: 1 OF 2024 Petition ttnr:ier :iection [151 ] [praying ][that in ][th':; ][circurnstances ][stated]in the affidavit [tiled ][i. ][support ][of ][the ][petition, the High ][c,rurt ][may ][be ][pleased ][to]stay all further [oro ][;;.:dings ][pursuant ][to ][the ][Assessment ][order ][1t. ][22.03.2024]passed by the :]rcl re [s ]oondent [uts ][147 ][r.w.s ][1448 ][of ][the ][ncome-tax ][Act ][for A.Y.]2015-16 vide DrN [Nc. ][ITBA/AST/S.1147 ][12023-2411063195r'50('l ][)] Counsel for the' [Pelitioner: ] Counselforth€,Re,;oondents:Ms.J.SUNITHA,JT.SCFCIRINCOIJIETAX The Court made [thr: ][f ][ollowing: ] TIIE HONOURABLE SRI JUSTICE P.SAM KOSHYANDTHE HONOTIRABLE SRT JUSTICE NARSING RAONANDIKONDA WRIT PETITION No.34 606 of2024 ORDER; (per Hon'ble Sri Justice P.Sam Koshy) Heard Mr. Manmohan Dundu, leamed counsel for the petitioner and Ms. J.Sunitha, learrred Junior Standing Counsel forthe Income ['fax ]Department for the respondents. perused therecord. 2. This is a writ petition where the proceedings are eitherchallenged to the notices which were issued under Section 14gAand 148 of the Income Tax Act, 1961 (for short,the Act') ortheassessment orders those have been passed under Section 147 ofthe Act which have been assailed. Counselforth€,Re,;oondents:Ms.J.SUNITHA,JT.SCFCIRINCOIJIETAX The Court made [thr: ][f ][ollowing: ] TIIE HONOURABLE SRI JUSTICE P.SAM KOSHYANDTHE HONOTIRABLE SRT JUSTICE NARSING RAONANDIKONDA WRIT PETITION No.34 606 of2024 ORDER; (per Hon'ble Sri Justice P.Sam Koshy) Heard Mr. Manmohan Dundu, leamed counsel for the petitioner and Ms. J.Sunitha, learrred Junior Standing Counsel forthe Income ['fax ]Department for the respondents. perused therecord. 2. This is a writ petition where the proceedings are eitherchallenged to the notices which were issued under Section 14gAand 148 of the Income Tax Act, 1961 (for short,the Act') ortheassessment orders those have been passed under Section 147 ofthe Act which have been assailed. 3. This writ petition is being taken up today only on one of thegrounds, that the notices issued under Section l48A of the Actand the subsequent initiation. of proceedings under Section 14g ofthe Act by the jurisdictional Assessing Officer, whereas in termsof the amendment that was brought to the Income Tax Act by wayof Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings under Siectitt: [148A ][of ][the ][Act ][as ][also under ][St:ction ][L'18 ][of ][the]Act ou3ht [o ]have [also ][been ][issued and procee'Jed ][in ][a ][f-aceless]mannel.4. ' 'h,: : :rntention of the petitioner is that th'-' issue ofproceer l ir.r-c:i reing [in ][violation ][of ][the ][Finance ][. ][\ct, ][ll()i ][1 i ][e', ][the]r:lices [under ][Section ][148,{ ][and Sect ][on ]['4ti ][rf ][the ][Act]impugrLe,:l not beirg ir;rrrted in [a ][faceless ][manner,' ][have ][alreerdy ][t'een ][dealt ][with]and d:c ct.:: by this [Courl ][in ][the ][case ][ol' ][KANI(ANALA]RAVINI)F|.4 [vs. INCOME-TAX ][OFFIC'E'Iilr ][decided]on 14.()9 2 )i i [whereby ][a batch ][of ][writ ][petitions ][we't: ][rrl ][lon'ed ][and]the proceerl trgs [initiated ][under ][Section 148A ][as ][also utrt ][er ][Section]148 of the .r.:t rvere hetd [to ][be ][bad ][with ][consequintizll ][r: ][ie1-s ][on ][the]grounc crf t [.,cing ]in violation [of ][the ][provisions ][lf ][S:cti<'n ][15lA ][of]the Act re ri [,vith ][Notifrcation ][l8l2o22 ][daLed2g ][03.:''022 ][The ][said]judgrn:nr prr,scd by this Court has also [been ][subseqtiently ][followed]irr a larg,: nt irber [of ][lr'rit ][petitions ][which were ][allo ][u'ed ][on ][similar]terms ' l(202 [i) ] [r ][( ][laxmann.com ][178 ][(Telangana)l] 5. Down the line, we hnd that the same issue has also beendecided against the Revenue by various High Courts i.e.,by the Bombay High Court in the case of HEXAWARETECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONEROF INCOME TAX & OTHERS2, Gauhati High Courr in the caseof RAM NARAYAN SAH vs. UNION OF INDIA3, punjab andHaryana High Court in the case of JATINDER SINGH BANGUvs. UNION OF INDIA4, and Telangana High Court in the case ofSRI VENKATARAMANA REDDY PATLOOLA vs. DEPUTYCOMMISSIONER OF INCOME TAX5 where the issue was inrespect of intemational taxation, Bombay High Court in the case ofABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICER,INTERNATIONAL TAXATION6 which is again on intemationaltaxation and central circle, High Court of Himachal pradesh in thecase of GOVIND SINGH vs. INCOME TAX OFFICERT,Gujarat High Court in the case of MANSUKHBHAI' lzoz+1464 [430 ][(Bom)]'[(2024) 156 taxmann.com 478 (Gauhati)]" l(2024) 165 taxmann.com 115 (Punjab & Haryana)l'12024) 167 taxmann.com 4l I (Telangana)l" [2024) 166 taxmann.com 6Tg (Bombay)]' [2024) 165 taxmann.com 113 (Hirnachal Pradesh)] D.{HYABII,\I RADADIYA [vs. ] [tAX ][OFFICER,]WARD :!(3){5)8, [Jharkand ][High ][Court ][in ][the ][casr: ][c'f ] SUND SrtW [vs. ] [INDIAq, ][Rajasrhan ] [Iig h ][Courl ][in]{If the case r:1 SHARDA [vs ][INCO\{E ] OFFI(lliR ,t ANOTHER [and ][batch ][of ][writ ][petitiorLsr') ][which]stood rleci,1,: J on [19.03 ][.2024. ][Similar v'ews ][have also ]['reen taken]by the I)i [uirion ][Bench ][of ][Calcutta ][High ][Cor ][Lrl ][in ][tI ][e ][case ][of]GIRDtL,\ll GOPAL [vs. ] [& ] (M.A.'t 169( of 2023), decided [on25.09.2024.]6. E.r' e:.r l.rough the same [issue ][having ][been dec,ded ][b1' ][a ][large]numbel ol'l- igh Courts, [we ][are ][still ][conlronted ][witl ][larl1e ][tiling of]identic al rr i tters on daily [basis ][ranging ][betv"een ][5 ]['o ][10 writ]the [instructions ][being ][sotrght ][fiom ][the]petitions. ['ihat ]upon Depar,.n.ierrr . thev have [been ][taking ][a ][solitary ][g'our ][d ][that ][the]decision [,.' ]I' the Bombay High [Court ][in ][the ][,:ase ][ol ][Hexaware]Tecltnolo.tlits Ltd., [(2 ][supra) ][as ][also ][the on': ][u ][hicl' ][has ][been]decidetl b, rl-ris Courl in [the ][case ][of ][Kanakal'a Ravin'drs Redd!] *202+ SCC ,, nl,ine Guj 4012'2025 [S(l(. ][itnline ][Jhar ][287]"' 7202 [)','R. ][" J ][r):4984-DBl] (1 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 ofthesame issue being decided by various High Courrs.7. To a query being put to the leamed counsel for the Revenue,they have categorically accepted the fact that there is no interimorder granted by the Hon'ble Supreme Court in any of thesematters pending before it. Meanwhile, fresh writ petitions ofidentical nature are being piled up before this Bench on daily basisand the pendency is getting increased on matter which otherwisehas already been dealt and decided by this very High Court itself.8. On the one hand, even though the order of this Court thatwas passed as early as on 14.09.2023 and more 16 months havelapsed, till date, we do not find any remedial steps having beentaken by the Income Tax Department to take appropriate steps toeither hold back issuance of notice under Section 148.{ and underSection 148 of the Act by the jurisdictional Assessing Offrcer,rather the authorities concemed in the teeth of series of decisions by a1l t)ir: naior High [Courts ][in ][India are ][continu:usly ][still]initiatirg, pr',rceedings [under Section ][1484. ][of ][the ][Ac ][ar.rd ][also]initiati'rg, 1r'oceedings under Section [148 ]ol [tlx ][Act ][in]contra'/en1 o- to the amendments brought [into tlie ][ItLcon ][re ][I'ax ][Act]pursuant t( tre Finance Act,2020 [as ]also [the ][Firanct: ][Ac: ][2021.]9 [JJron :r query being [put ][as ][to ][why can't ][1]1i5 ][rvrit ][petition ][be]dispos,:d r:1 in the teeth of the [decision rendercd ][b" ][tr ][s ][Court ][in]the case o' lianakala Ravindra [Reddy ][(l ][supra), ][lerrueI ][Standing]Couns,:l fi-r [.he ]Income Tax [Department conten,ls ][tL ][at ][tl ][Lose ][rvould]unnecos-sar it , burden the Income Tax [Departrneilt ][\''here ][they]u'ould be r.:quired to f,rle equal number of SLPs telore [the]Hon'blr' -srlrrerne Court and it would be furher [bur,lening ][the]excherlusr o the Union of India. It [was also ][the ][ccnte:r'tion ][of ][the]leame,l iitrL::1ing Counsel that no prejudice [wor. ][ld ][bc ][ca-rsed ][to ][the]interest r,1 r rt: petitioners in case if this writ [petit ]ion [is ]lt'pr [pending]till th: firr lization of the SLPs pending b.:for,: tl'le Hon'bleSuprerne [r..l:ur1 ]and the fact [that the ][petitioner ][rs ][alrcacy ][cnjoying]the be,re fit :f interim protection. Nonetheless, [,.rn ]tlre [t:i ]rlier [query]of this [(lorr. ]as to why the Income Tax Departntent hav I [not come]out ri'rth a rrechanism to issue appropriate inslructiors or to take appropriate steps in ensuring that proceedings under Section 14gAof the Act as also the assessment orders under Section 14g of theAct are kept in a hold in the light of the decisions decided by theof the Act as also the assessment orders under Section 14g of theAct are kept in a hold in the light of the decisions decided by thevarious High Courts, it was submitted by the leamed StandingCounsel that the said steps can only 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 Courls.as any such steps would have to be taken pan India and cannot belimited to any of these jurisdictional High Courls. 10. As a result of which, what we are facing is steep increase oflitigation day in and day out even though various orders have beenpassed by this High Court allowing writ petitions on the very sameissue. The Income Tax authorities concerned are still even now in2025 also initiating proceedings in contravention to the provisionsof Section 151A of the Act and as a result by now, more than 600to 700 petitions have been already got piled up before this HighCourt on an issue which otherwise stands squarely covered by thejudgment of this Courl in the case of Kanakalu Ravindra Reddy(1 supra). What is also surprising is the fact that though whileallowing the writ petitions in the case of Kanakala Ravindra .Reddy (l supra), the Division Bench while reseruing the right ofthe Revenue, has also protected the interest of the petitioners insofal rs [t ]he liberty [which ][was ][granted ][to ][the ][Fi-r ]'venue [for]initiating [1",: ]'h [proceedings ][strictly in ][accordanc,: ][wifi ][tl ][e ][arnended]provis,ons ;l'the Act, [as amended ][by ][the Finance ][r\tt ][2020 ][and]the Filan<:r: '\ct,2021. [The ][petitioner ][assessee ][rvould ][trc' ][elltitled ][to]challen"e,: tr raise the [other ][legal objections ][if ][the R,'r ][Fr ][rrL' ][initiates]fi'esh [prr><: ][e ]t dings. [The ][Department ][has ][made ][no ][en ][ieavout ][in]availing tl't said liberty [that ][was ][reser-'ved ][for ][the ][Rt:r'en ][ue ][On ][the]contrarl [t ]I [r:y ]have [been ][still ][sticking on ][to ][the ][stancl, r'vhich ][this]t as well as [many other ][High ][Courts ][alr':rrd1 hetd ][to ][be]Fligh [,-'cu ]bad.1 l. lt ar:r:r:ars that because of [the ][aforesaid ][libertl' ][th'Lt ][this ][High]Court hzr<l [glanted permitting ][the ][Revenue ][for ][initiating ][liesh]proce,rdin ls as a one-time measurer [in ][a ][fal:ele,is ][l'tanner, ][the]Incorrr,: ['I ]ri Depaftment [wants to take ][advantrge ][i:'l ][t ][rc ][satne ][by]protrec:Lin : ' hese proceedings wlich [would ][enal-rle ][t ][rern ][to ][rreet ][the]limitaticn tlrat would [otherwise ][come ][in ][the ][wlry. ] [i[:t'rvjse, ][if ][the]rvrit p'ct tir:ri is kept pending for [a ][considerable ][lonrr ][period ][of ][time]and lr na ll ' rt a later stage if [the ][Hon'bie ][Supr;me ][Cot ][Ltt ][confirms]the d:cisicrr taken by this High [Court ][as ][alsc,b)'ll.r': ][other ][High]Courls ir' ,vhich the SLPs are still [pending, ][ttre ][Irrcome ][Tax] Department would get the advantage of the riberty that is otherwiseprotected in favour of the Revenue for initiation of freshprotected in favour of the Revenue for initiation of freshproceedings from the disposal of these matters at a much later stagewhich would be advantageous and beneficial to the Revenue andwould be equally disadvantageous and detrimental so far as interestof the assesses are concemed. As a consequence, the Income TaxDepartment gets an extended period of time for initiation of freshproceedings.would be equally disadvantageous and detrimental so far as interestof the assesses are concemed. As a consequence, the Income TaxDepartment gets an extended period of time for initiation of freshproceedings. Department would get the advantage of the riberty that is otherwiseprotected in favour of the Revenue for initiation of freshprotected in favour of the Revenue for initiation of freshproceedings from the disposal of these matters at a much later stagewhich would be advantageous and beneficial to the Revenue andwould be equally disadvantageous and detrimental so far as interestof the assesses are concemed. As a consequence, the Income TaxDepartment gets an extended period of time for initiation of freshproceedings.would be equally disadvantageous and detrimental so far as interestof the assesses are concemed. As a consequence, the Income TaxDepartment gets an extended period of time for initiation of freshproceedings. 12. The alarming trend of docket explosion in this Court, despitethe clear precedent set in Kanukala Ravindro Reddy (1 supra), is amatter of grave concern. The Income Tax Department's persistentinitiation of fresh proceedings, disregarding the established judicialpronouncements, has ied to an unprecedented surge in litigationwith over 600-700 petitions piling up on the same issue. Thisdeliberate approach not only undermines the principle of judicialprecedent but also strains the judicial resources unnecessarily. TheDepartment's strategy of awaiting the Supreme Court's decision onpending SLPs while continuing to initiate fresh proceedingsappears to be a calculated move to buy time and circumventlimitation periods, rather than adhering to the established legal position. StLch conduct [raises ][serious questiorrs ][rbout ][the]administta' [i ][r ][,: ]efficiency [and ][the ][resp('ct ][tirt ][judicial]prorlot r(.e rr,:nts, [particularly ][when ][this ][Court ][has al:ead y ][plovided]a balartced [e ]rproach [by ][preserving ][both the ][Rt:venue's ][lights ][and]assess()s inl. ) ["ests.] 13. Anolror aspect [which ][needs ][to ][be ][conside ][red ][is ][thaL ][in fact ][it]shoulc lr,r,, c been [realized ][by ][the ][Income ][Tax ][Depalr.mor.t ][itself ][and]shoulc ha.,, c found [out ][via ][rnedia ][in ][ensurinl ][tJrat ][g ][loceedings]under S,,:c,it,ns 148-A [and ][i48 ][should not ][har' ][e ][bt:en ][ssued ][in ][a]fircele;s rriJlrr-rer, at [least ][till ][the ][Hon'ble ][Suprene Courr ][dccide ][the]twelvc hurt,ired [(1200) ][odd ][SLPs ][which ][it ][is ][alrr:ad.u-. ][seized ][of or, ][at]Ieast lrt,, [rt::ome Tax [Deparlment should ][har ][e ][1'rLurt ][ollt ][some]remedial [:r('ps ]to ensure [that ][wherever ][the ][a.lthoritic; ][intend ][to]initiat: 1tr,r:::eclings under [Sections ][148-A ][and ][[48. ]'r1 [h:r ][than ][in ][a]facelcss t irtrner, the [proceedings ]should [h:rve ][bt:e ][n ][deferred]rvitho,rt prr'r:ipitating the [matter ][further ][intimating ][tre ][a;sessee ][that]they sh:r11 rrLitiate appropriate [proceedings ][onll' ][afte'r ][lh: ][ST'P's ][are]decicl,:d [:r the Hon'ble Supreme [Court on tlre ][r':t1 ][;atne ][issue']This :-gr'.irr. .he Income Tax Department, [has ][nol ][bectt ][al'le ][to ][give ][a]convi'-'tc nl leply, except for the [fact that ][such a ][iecis ][-on ][if ][at ][all] has to be taken, has to be taken for the whole of India, and whichotherwise has to be by way of a policy decision and that too at thelevel of Central Board of Direct Taxes. Though the leamedStanding Counsel for the Income Tax Department contended thatthe Delhi High Courl dismissed a writ petition of similar nature, onthe one hand when the High Coufi is struggling to reduce itsper-rdency, such notices which are under challenge in this writpetition are forcing the assessee to knock the doors of this HighCourt resulting in filing of hundreds of new writ petitions which inthe long n-rn not only affects the disposal of the w-rit petitions butalso consumes substantial time of the Bench in hearing thesematters again and again on daily basis. Admittedly, in spite of thematter before the Hon'ble Supreme Court having been taken onmany occasions, the Hon'ble Supreme Court which is seized of thematter has been reluctant in granting any interim protection to theIncome Tax Department. Yet, the authorities concemed at theState level are not ready to accept the verdict passed by a majorityof High Courts of different States on the same issue; and to makethings fuilher worse, the Income Tax Department is showingaudacity by issuing notices continuously under Sections 148-4 and 148 throuulr the [jurisdictional ]Assessing Ofhcr:r whcre ls it oughtto ha\/ I l',e,-'r only in the faceless manner. l.+. [n ]r: case of BANK OF INDIA vs. AS,SISI'ANT COMI'IISSTONER, INCOME TAXil, on an isisue rvlrt ther it wasjustifii:ble rn the part of the Income Tax I)epiLrtrt:nt ln notttrllowinq ,r r order passed by the adjudicating arrthoritl onh on thegrounrl thrrt r:he appeals are pending, the Division Be:rch of theHigh Oorrl r f Bombay held at paragraph No.25 as urder, viz.,ttrllowinq ,r r order passed by the adjudicating arrthoritl onh on thegrounrl thrrt r:he appeals are pending, the Division Be:rch of theHigh Oorrl r f Bombay held at paragraph No.25 as urder, viz., '25 ^,/r. Paridwalla has rightly drawn out iattentior to thedt:cisir:. of this Court in Commissioner of Inconre Tax vs. Smt.Godavaridevi Sarafl2 as also the recent decision of tlre co-ordrrale 3ench of this Court in Samp Furniture (P) Ltd. v lTO13of [,ryhir: ]I rne of us (Justice G.S. Kulkarni) was a nrember, \,! hereinth: l:,Lrrl categorically observed that the Revenue l-avi|g not"acceplo ;" the judgment of the High Court would not n'ean hat tillth: .sarne is set aside in a manner known to law, it wo| d lo )se itsbirdirc l,rrce. Referring to the decision of the Suprerre 3rurt inUrrion ol lndia vs. Kamlakshi Finance Corporation Ltd.r4, theCourt rr r:erved that the approach of the officials of Reve rue oftreatrnrt [(iecisions ]being ["not ]acceptable" was criticl::ed l)y theSrtpr:rr : Court. ln such decision, following are the i'€ levantoi sen' r i 1ns made by the Supreme Court. ll [lfzoz ][s ][r ] ['7 ][) raxnann.com ][422 ][(Bombay)l]'' 1l9zs1 [l ][t'R ][589 ][(Bombay)]" 120201'65 [axmann.com 581/300 ]Taxman [452 ][(B:rmbri)] 'o 1tO9:'.1ta) [rrilnn.com ][16/55 ] 433 [(SC)] ll [lfzoz ][s ][r ] ['7 ][) raxnann.com ][422 ][(Bombay)l]'' 1l9zs1 [l ][t'R ][589 ][(Bombay)]" 120201'65 [axmann.com 581/300 ]Taxman [452 ][(B:rmbri)] 'o 1tO9:'.1ta) [rrilnn.com ][16/55 ] 433 [(SC)] "6. Sri Reddy is perhaps right in saying that theofficers were not actuated by any mala fides inpassing the impugned orders. They perhapsgenuinely felt that the claim of the assessee was nottenable and that, if it was accepted, the Revenuewould suffer. But what Sri Reddy overlooks is that weare not concerned here with the correctness orotherwise of their conclusion or of any factualmalafides but with therfact that the officers, in reachingin their conclusion, by-passed two appellate orders inregard to the same issue which were placed beforethem, one of the Collector (Appeals) and the other ofthe Tribunal. The High Court has, in our view, righflywould suffer. But what Sri Reddy overlooks is that weare not concerned here with the correctness orotherwise of their conclusion or of any factualmalafides but with therfact that the officers, in reachingin their conclusion, by-passed two appellate orders inregard to the same issue which were placed beforethem, one of the Collector (Appeals) and the other ofthe Tribunal. The High Court has, in our view, righflycriticrzed this conduct of the Assistant Collectors andthe harassment to the assessee caused by the failureof lhese officers to give effect to the orders ofauthorities higher to them in the appellate hierarchy. ltthe harassment to the assessee caused by the failureof lhese officers to give effect to the orders ofauthorities higher to them in the appellate hierarchy. ltcannot be too vehemenfly emphasized that it is ofutmost importance that, in disposing of thequasijudicial issues bgfore them, revenue officers areutmost importance that, in disposing of thequasijudicial issues bgfore them, revenue officers arebound by the decisions of the appellate authorities.The order of the Appellte Collector is binding on theAssistant Collectors working within his jurisdiction andthe order of the Tribunal is binding upon the AssistantThe order of the Appellte Collector is binding on theAssistant Collectors working within his jurisdiction andthe order of the Tribunal is binding upon the AssistantCollectors and the Appellate Collectors who functionunder the jurisdiction of the Tribunal. The principles ofjudicial discipline require that the orders of the higherappellate authoritles should be followed unreservedlyjudicial discipline require that the orders of the higherappellate authoritles should be followed unreservedlyby the subordinate authorities. The mere fact that theorder of the appellate authority is not "acceptable,, toorder of the appellate authority is not "acceptable,, tothe department - in itself an objectionable phrase -and is the. subject maiier of an appeal can furnish noground for not following it unless its operation hasand is the. subject maiier of an appeal can furnish noground for not following it unless its operation hasbeen suspended by a competent court. If this healthy -Lrli) rs not followed, the result will only be ttnd.l,r'zrrassment to assesses and chaos in adn'rinistratic r:,f 1ax laws. -Lrli) rs not followed, the result will only be ttnd.l,r'zrrassment to assesses and chaos in adn'rinistratic r:,f 1ax laws. ",'. We have dealt with this aspect at sotne long tf ,:,(r,:ause it has been suggested by the learna [1]irrl litional Solicitor General that the observ:tion';r:rje by the High Court, have been harsh on th ):rfiicers. lt is clear that the observations ci the H [g ]tO ).rrt, seemingly vehement, and apparentl rLrnl:alatable to the Revenue, are only intenced k) cLtr )ir tendency in revenue matters which, if allowed t [I]l)o1)ome widespread, could result in considr,'rabl:>lr:rr;assment to the assesses-public without any Lenerf tl:flhe Revenue. We would like to sa,/ that thr)rler;iartment should take these observaticns i,t th I6rrcper [spirit. ][The ][observations ][of the ][l-1igh ][Co:rt]r trould be kept in mind in future and the utnost regar:l: l,rruld be paid by the adjudicating authorities and th )irl)l)ellate authorities to the requirements of [judici:rl]:lis:ipline and the need for giving effect to lhe ordorilf :he higher appellate authorities which a'e b ndin lon them." 1 5. \\ h , t is worrying this Bench more i: th,-' [1a ]:t that anendea..our r s being made whole heartedly to enliure I1o - .o generatelirrther' liLi _rrlion on issues which have been lai,:l to le:;t by a largenumb(r',rl I igh Courts all of whom.have taken a consistent standthat th: acti:n of the Income Tax Department being viclLtive of the Finance Ac!2020 and Finance Act,202l. Now, in order to protectthe interest of the Revenue as also that of the assessee, it would bethe 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 disposal of the instant writ petition interms of the judgment rendered by this High Courl in the case ofKankanala Ravindra Reddy (l supra) shall however be subject tothe outcome of the SLPs which were filed by the Income TaxDepartment and which is pending consideration before the Hon,bleobservation /direction that the disposal of the instant writ petition interms of the judgment rendered by this High Courl in the case ofKankanala Ravindra Reddy (l supra) shall however be subject tothe outcome of the SLPs which were filed by the Income TaxDepartment and which is pending consideration before the Hon,bleSupreme Court. 16. In the given facts and circumstances, this Bench is of theconsidered opinion that unless and until we do not timely disposeof matters which are squarely covered by the decision of this Couftand which stands forlified by the decisions of the various otherHigh Coufts on the very same issue, the pendency of this HighCourt would further be burdened which otherwise can be decidedand disposed of as a covered matter. 17. So far as the intercst of the Revenue is concemed, we are ofthe considered opinion that the intereSt of the Revenue has alreadybeen considered and protected, as has been observed in paragraphs..\._- 36,31 tncl.iI ofthe order which, for [ready referenct:. ][i:; ][eproduced]hereurLdt:l l: For all the aforesaid reasons, the [impugneJ ][nol ces]ssued and the [proceedings ]drawn by [th€, respor,c3nt-]l€ oartment is neither tenable, nor [sus,tairtable.]rl"e notices so issued and the procedure ;rdopted br:ingr:r se illegal, deserves to be and are aocorCingy [set]as Ce/quashed. As a consequence, all t're [irrpttltned]l1,1ers getting [quashed, ]the consequential [orders pa:'sed]r/ the respondent-Department pursuant t.) tho nll [ces]s s red under Section 147 and 148 woul<i also [get]:lL ashed and it is ordered accordingly. [The ][reas()r ][we]a'r [quashing ]the consequential order [is ]on the t)rincilleslirrt when the initiation of the [proceedings ]ilsel' [was]oocedurally wrong, the subsequent orders ;rlso ;etsn u llified automatically. l: For all the aforesaid reasons, the [impugneJ ][nol ces]ssued and the [proceedings ]drawn by [th€, respor,c3nt-]l€ oartment is neither tenable, nor [sus,tairtable.]rl"e notices so issued and the procedure ;rdopted br:ingr:r se illegal, deserves to be and are aocorCingy [set]as Ce/quashed. As a consequence, all t're [irrpttltned]l1,1ers getting [quashed, ]the consequential [orders pa:'sed]r/ the respondent-Department pursuant t.) tho nll [ces]s s red under Section 147 and 148 woul<i also [get]:lL ashed and it is ordered accordingly. [The ][reas()r ][we]a'r [quashing ]the consequential order [is ]on the t)rincilleslirrt when the initiation of the [proceedings ]ilsel' [was]oocedurally wrong, the subsequent orders ;rlso ;etsn u llified automatically. :; . The [preliminary ]objection raised by the [petltion,rr ][ls]s - stained and all these writ [petitions ]stan(ls al [ower ]I [on]tlr s very [jurisdictional ]issue. Since the impt-tgned [nc"ices]arrl orders are getting [qua-shed ]on the [porn ][of]irrrisdiction, [we ][are ][not ][inclined ][to ][proceed ][fu ][ther ][and]de ,:ide the other issues raised by the [petitiorer wlich]stirnds reserved to be raised and conlend()d ir [an]a [p ]oropriate proceedings. : ti. Since the Hon'ble Supreme Court had, [in ][th€r ][)ase]cf .Ashish Agarwal, supra, as a one-time mea;ureerercising the powers under Article [' ]42 o' theC.onstitution of lndia, [permitted ]the Revent.te tc or,rceedurder the substituted [provisions, ]and this [(loun ]allo,vinglll ] petitions only on the [procedural ]flaw, the ['ight] conferred on the Revenue would remain reserved toproceed further if they so want from the stage of theorder of the Supreiiie Court in the case of AshishAgarwal, supra. 18. We would only further like to make observations that sincewe are inclined to dispose of the instant writ petition, conscious ofthe fact that the earlier order of this High Court in the case ofKanakala Ravindrq Reddy (l supra) is subjected to challengebefore the Hon'ble Supreme Court in SLp No.3574 of 2024,preferred by the Income Tai Department, we make it clear thatallowing of the instant writ petition is subject to outcome of theaforesaid SLP preferred by the Revenue against the decision of thisHigh Court in the case of Kanakala Rsvindra Reddy (l supra).This, in other words, would mean that either of the parties, if theyso want, may move an appropriate petition seeking revival of thiswrit petition in the light of the decision of the Hon'ble SupremeCourr in the pending SLP on the very same issue. 19. Accordingly, the instant writ petition stands allowed infavour of the assessee so far as the issue of jurisdiction isconcemed. As .a consequence, the impugned notice underchallenge under Sections 148-4 and 148 stands set aside/quashed. The cot ts,,:q [:e ][ntial ][orders, ][if ][any, also ][stand ][set ][asi'lei ][llashed ][in]sin.rilar teln': [rs ][have been ][passed ][by this ][High ][Crlurt ][in ][tlre ][case ][of] Kankuttola [Rrwindra ][Reddy ][(l ][supra)' ][There shall ][b': ][1') ][order ][as] to costs [.] Oo;r;ec uently, [miscellaneous ][petitions pen'Jing' ][it ][r'n1 ][, ][shall] stand c [os,e,] SD/.K.AMMAJIDEPLI'IY JI)/ITRUE ISEC TIONOFFICER To,o r'' ""'1I::,J8f; [3[]:,., ][;,X:, ][oii:ffi ][J3[3 ]" [. ][l,il9 ][f,,"531'i;' ][] iSli ] [:: ][u ][J'to' ]1I::,J8f; [3[]:,., ][;,X:, ][oii:ffi ][J3[3 ]" [. ][l,il9 ][f,,"531'i;' ][] iSli ] [:: ][u ][J'to' ]2H?[i [ri ][ii? ]ri.", 3:I[it1EfJ,'l',:fr?..:B:n [;ffi ][[i3; ][I' ][1 ][.th ][Froo ][r' ][c-]": ": 3The Asses:;rT ent [Unit, ][lncome ][Tax ][Departm'lnt ]No [Narional ]+(' 1 [2nd ][Faceless] [oor' ][E.]lix;3ii:;,: [ir ][#lt"r,l'l,xi*,:li3eaTi*o' ]lix;3ii:;,: [ir ][#lt"r,l'l,xi*,:li3eaTi*o' ] One CC [[tc, ][SFl ] [MANIVIOHAN' ]][[SFl ] [MANIVIOHAN' ]][ [MANIVIOHAN' ]][[MANIVIOHAN' ]][[Advocate ]][[[OF']UC']] stand c [os,e,] SD/.K.AMMAJIDEPLI'IY JI)/ITRUE ISEC TIONOFFICER To,o r'' ""'1I::,J8f; [3[]:,., ][;,X:, ][oii:ffi ][J3[3 ]" [. ][l,il9 ][f,,"531'i;' ][] iSli ] [:: ][u ][J'to' ]1I::,J8f; [3[]:,., ][;,X:, ][oii:ffi ][J3[3 ]" [. ][l,il9 ][f,,"531'i;' ][] iSli ] [:: ][u ][J'to' ]2H?[i [ri ][ii? ]ri.", 3:I[it1EfJ,'l',:fr?..:B:n [;ffi ][[i3; ][I' ][1 ][.th ][Froo ][r' ][c-]": ": 3The Asses:;rT ent [Unit, ][lncome ][Tax ][Departm'lnt ]No [Narional ]+(' 1 [2nd ][Faceless] [oor' ][E.]lix;3ii:;,: [ir ][#lt"r,l'l,xi*,:li3eaTi*o' ]lix;3ii:;,: [ir ][#lt"r,l'l,xi*,:li3eaTi*o' ] One CC [[tc, ][SFl ] [MANIVIOHAN' ]][[SFl ] [MANIVIOHAN' ]][ [MANIVIOHAN' ]][[MANIVIOHAN' ]][[Advocate ]][[[OF']UC']] 4One CC [[tc, ][SFl ] [MANIVIOHAN' ]][[SFl ] [MANIVIOHAN' ]][ [MANIVIOHAN' ]][[MANIVIOHAN' ]][[Advocate ]][[[OF']UC']]5One CC to [[.]r; ][J.SUNITHA, Jr' SC FOR INCOME ][Tr\X ][[()PU ][]l]5One CC to [[.]r; ][J.SUNITHA, Jr' SC FOR INCOME ][Tr\X ][[()PU ][]l] 5 6Two CD [C:oli:l;] BSRYBSK YY HIGH COIJR't' DATED:2510'4,12025 ORDER WP.No.34606 of 2024 ALLOWING TF{E WRIT PETITION,WITHOUT.C.SSTS ,{A 16E*- ,y'.:"E:k'".,( (J-Ipo0i J)t 20?5-E.),t?r{)i\i)1.1'lu