Bapi Reddy Daggubati Vs Union of India — Income Tax | Telangana HC (2025)

Bapi Reddy Daggubati Vs Union of India — Income Tax | Telangana HC (2025)

What the court decided

AI extract

Outcome

Writ of certiorari granted: the impugned notice u/s 148A(d) and notice u/s 148 (both dated 29.02.2024) and the order dated 25.03.2025 u/s 147 r/w s.144 for AY 2020-21 are set aside/quashed, along with consequent/subsequent notices/orders/penalties; miscellaneous petitions closed; no order as to costs; allowance made subject to the outcome of SLP No.3574 of 2024 pending before the Hon'ble Supreme Court, with liberty to either party to seek revival.

Issue for consideration

Whether the notices issued under Sections 148A and 148 and the subsequent reassessment proceedings conducted by the jurisdictional Assessing Officer (instead of in a faceless manner mandated by the Finance Act, 2021 amendments, i.e., Section 151A read with Notification 18/2022 dated 29.03.2022) are valid. +1 more

Court's answer

The writ petition is allowed in favour of the assessee on the issue of jurisdiction; consequently the impugned notice under challenge under Sections 148A and 148 stands set aside/quashed.

Ratio / Principle

Consequential orders, if any, also stand set aside/quashed in similar terms as passed by this High Court in Kankanala Ravindra Reddy; there shall be no order as to costs and miscellaneous petitions, if any, stand closed.

Key takeaways

The writ petition is disposed of in terms of the judgment of this Court in Kankanala Ravindra Reddy, with such disposal made subject to the outcome of the SLPs filed by the Income Tax Department pending before the Hon'ble Supreme Court.ratio¶¶96
The interest of the Revenue is protected, as observed in paragraphs 36, 37 and 38 of the Kankanala Ravindra Reddy order reproduced in this judgment, including the Revenue's reserved liberty to initiate fresh proceedings strictly per the amended provisions.ratio¶¶98
Allowance of the writ petition is expressly subject to the outcome of SLP No.3574 of 2024 preferred by the Revenue against the Kankanala Ravindra Reddy decision; either party may move an appropriate petition seeking revival in light of the Supreme Court's decision in the pending SLP on the very same issue.

Detailed headnote1 paragraphs

Telangana High Court (Division Bench: P. Sam Koshy and Narsing Rao Nandikonda JJ.; order per Narsing Rao Nandikonda J.) allowed a writ petition by an assessee challenging (i) a notice u/s 148A(d) and a notice u/s 148 of the Income Tax Act, 1961, both dated 29.02.2024, and (ii) an order dated 25.03.2025 u/s 147 r/w s.144, all for AY 2020-21, solely on the jurisdictional ground that after the Finance Act, 2021 amendments (w.e.f. 01.04.2021) such proceedings had to be initiated in a faceless manner under s.151A read with Notification 18/2022 dated 29.03.2022. Following its own decision in Kankanala Ravindra Reddy (14.09.2023, (2023) 156 taxmann.com 178 (Telangana)) and consistent rulings of the Bombay, Gauhati, Punjab & Haryana, Himachal Pradesh, Gujarat, Jharkhand, Rajasthan and Calcutta High Courts (including Hexaware Technologies and Bank of India on judicial discipline), the Court quashed the notices and all consequential orders. The disposal was made subject to the outcome of SLP No.3574 of 2024 and about 1200 allied SLPs pending before the Supreme Court (on which, as accepted by Revenue counsel, no interim order existed), with liberty to seek revival; the Revenue's liberty to initiate fresh proceedings per the amended provisions was preserved per paras 36-38 of Kankanala. Other issues were left open. Costs: none. The Court deprecated the Department's continued non-faceless initiations, which had piled up 600-700 identical petitions.

13447¹

HIGH COURT^{FORTHE STATEOF TELANGANA AT HYDERABAD} (SPecial Original^{Jurisdiction)}

WEDNESDAY,^{THE SECONDDAYOF JULY} TWO THOUSAND^{AND TWENTYFIVE}

PRESENT

THE HONOURABLE^{SRI JUSTICE P.SAM KOSHY} AND THE HONOURABLE^{SRI .IUSiI.-CT'TMSING RAO NANDIKONDA}

WRIT^{PETITIONNO:187o2 oF 2025}

Between:

Bapi Reddy.Dagsubati,^{Son of siva R"!dv D,'Psbl?:'bfl3:i} 6;EL;;IL;^{Hor".t r'lo 1-'1-7oo/8/6/1'} 9round Nilavim, Backside^{villv' au"r' il"ar se-]-41gGandhi Nagar} ' $3:(i!:gt%T:^Musheerabad' S""cl;o;;b;;:^{Hvoeii'oao'reransana' 5ooo8o'}

...PETITIONER

AND

union^{of lndia, trilinistry of Finance, lncome Tax Department' New Delhi - 100} 011

2 Theofficeofcommissioner,lncom^e^TaxDepartment'tri'linistryofFinance' c""r#.",r"iof^{lnOiu,U"w Delhi - 100 01 1'}

3 officeofthelncomeTaxOfficer'Wq{-a(1)'HyderabadlTTowers'AC E,jr?tl rtri.io^{Tink.Hvderabad - 500004'}

4 The National^{Faceless AssessmentCenter'lncome.Tax Department' Ivlinistry} .i'Fi"L,it",^{b;Jernmentof lndia. New Delhi 100 011}

...RESPONDENTS

Petition under^{Article 226 of lhe Constitutionof lndia prayingthat in the} circumstances^{statedin the affidavit filedtherewith' the High Courtmay be} pleased to^{issuea writ or direction or order more particularlyin the natureof a-} writ of certiorari^{caling for the recordsand quashing the (i) rmpugnedorder} dated^{29.02.2024 bearing DIN and Notice NoITBA/AST/F/148A12023'} 2411061714713(¹ )for^{the AssessmentYear2O2O - 2f issuedunder Section} 14BA(d) of^{the lncomeTax Act' 1961 (ii) lmpugned Noticedated 29 'O2 '2024} bearingDlNandNoticeNo.TBfuAST/S/148112o23-24t1o6171546,1(1)forthe Assessment^{Year 2O2O - 21, issuedunQerSection 148 and (iii) lmpugned Order} dated^{25.O3.2O2ilbearingDIN and Notice No'ITBA/AST/S/'14712024-}

251107 4975145(1)issued under section 147 read with section 144 of the lncome Tax Act, 1961 as being i[egar and in vioration of appricabre law and consequenfly set-aside all co nsequent/subseq uent notices/o rders/pena rties and further restrarn the Respondents from making any assessment, reassessment or re-computation or otherwise proceeding against the petitioner on the basis of the aforementioned lmpugned order and Notice dated 29.o2.2024 and 20.o1 .2025.

lA NO: 1 OF 2025

Petition under Section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to dispense with the firing of certified copy or(i) Impugned order dated 29.o2.2024 bearing DIN and Notice No. rrBA/AST/Fi14BAr2o23- 24/1061714113(r)for the Assessment Year 2o2o -21,issued under Section 14gA(d) of the rncome Tax Act, 1961; (ii) Impugned Notice dated 29.02.2024 bearing DIN and Notice No. TBA/AST/S/148-1r2o23- 24/1061715461(1)for the Assessment year 2020 - 21 , issued under section r48 and (iii) rmpugned order dated 2s.o3.202s bearing DIN and Notice No. rrBA/AST/S/147/2024-2sr1074975.145(1)issued under Section 147 read with section 144 ol the lncome Tax Act, 1961.

IANO:2OF2 025

Petition under Section 151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to suspend all further proceedings pursuant to the lmpugned Order dated 25-03.2025bearing DrN and Notice No. |rBA/ASTrsr147r2o24-2sr1or4g7s145(1) for the Assessment year 2o2o-21, issued by the 3rdRespondent under Section 147 read with section 144 of the rncome Tax Act, 1g6r incruding aI consequenu subsequent notices/o rders/pena lties, in the interest of justice.

lA NO: 3 OF 2025

Petition under section 151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay the operation of lmpugned order dated 2s.03.2o2s bearing DIN and Notice No. |rBA/ASTlsl147r2o24-2s/107497s14s(1) for the Assessment year 2020 _

21, issued by the 3'd Respondent under Section 147 read with section 144 of lhe lncome Tax Act, 1961 including all conseq uent/subseq uent notices/orders/pen a lties, in the interest of lustice.

Gounsel for the Petitioner: SRI SHEETAL SRIKANTH

Counsel forthe Respondent No.1: SRI GADI PRAVEEN KUMAR, DEPUW SOLICITOR GENERAL OF INDIA

Counsel for the Respondent No.2 to 4: Ms. P.SAPNA REDDY, Sr. SC FOR lT

The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA

WRIT PETITION No.t8702 of 2025

Ozu)ER (per Hon'ble Sri Justice l'ctrsing Rao Nandikonda)

Heard Mr.Sheetal Srikanth, leamed counsel for the petitioner and Ms.B.Sapna Reddy, learned Senior Standing Counsel for the Income Tax Department appearing for the respondents. Perused lhe record.

2 This is a writ petition q'here the proceedings are either challenged to the notices which were issued under. Section i48A and 148 of the Income Tax Acr, 196l (for shoft^,the Act,) or the assessment orders those have been passed under Section 147 of the Act which have been assailed

This writ petition is being taken up today only on one of the grounds, that the notices issued under Sectior.r l48A of the Act and the subsequent initiation ofproceedings under Section l4g of the Act by the jurisdictional Assessing Olficer, u,hereas in terms of the amendment that was brought to the Income Tax Act by way - of Finance Act, 2021 w.e.f., 0l .04.2021 onwards, proceedings

2

under Section 148A of the Act as also under Section¹⁴⁸ of^the Act ought to have also been issued and^proceeded in^{a faceless} manner.

The contention of the^petitioner is that the^{issue of} proceedings being in violation ol the Finance Act,202l^{i.e., the} impugned notices under Section l48A^{and Section148 of the Act} not being issued in a laceless manner, have^{alreadybeen dealt with} and decided by this Court in the^case of^KANKANALA RAVINDRA REDDY vs. INCOME-TAX^{OFFICERTdecided} on 14.09.2023 whereby a batch^{of writ petitions were allowed and} the proceedings initiated under Section^{l48A as also under Section} 148 of the Act were hetd to be bad^{with consequentialreliefson the} ground of it being in violation of the^{provisions of Section 15lA of} the Act read with Notiflcation^{18/2022dated 29.03.2022. The said} judgment passed by this Court has also been subsequently followed in a large number of writ^{petitions whichwere allowed on similar}

.terms.-*---- *- - .-'

' l(2023) 156 taxmann.corn^{178 ('l'elangana)l}

.,

Dorvn the line, we find that the same issue has also been decided against the Revenue by various I{igh Courts i.e., by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati High CoLrrt in rhe case of RAM NARAYAN SAH vs. UNION OF lNDIAr, punjab and Haryana High Court in the case of JATINDER SINGH BANGU

vs. UNION OF INDIA4, and Telangana High Courl in the case of SRI VENKATARAMANA REDDY PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME TAX5 where rhe issue was in respect of international taxation, Bombay High Court in the case of

ABHIN ANILKUMAR SHAH vs. INCOME TAx OFFICER, INTERNATIONAL TAXATION6 which is again on intemarional taxation and central circle, High Court of Himachai pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICERT, Gujarat High Court in the case of MANSUKHBHAI

' lzoz+1464^{n-R 430(Bom)}

' [(2024) 156 taxrnann.com 478 (Gauhati)]

'1Q024) 165 taxmann.com l l5 (punjab & Haryana)l

' [2024) .GltaxLnann.com 4 i I (Telangana)] " [2024)^{166 taxmarLn.com} 679 (Bombay)] '12024) 165 taxmann.com I l3 (Himachal pradesh)l

4

.i

DAHYABHAI^{RADADIYAVS. INCOMETAX OFFICER'} WARD 3(3X5)E, Jharkand^{High Courl in the case of SHYAM} SUNDAR SAW^{vs. UNION OF INDIAe, RajasthanHigh Courtin} the case of SHARDA^{DEVI CHHAJERvs' INCOME TAX} OFFICER & ANOTHER^{and batch of writ petitionsro which} stood decided on^{19.03.2024.Simitar viewshave also been taken} by the Division^{Bench of CalcuttaHigh Courl in the case of} GIRDHAR GOPAL^{DALMIAvs. UNION OF INDIA & ORS} (M.A.T 1690 of^{2023), decidedon 25.0e'2024'}

Even though^{the same issuehavingbeen decided by a large} number of High Courts,^{we are still conlrontedwith large filing of} identical matters^{on daitybasis ranging between 5 to l0 writ} petitions. That upon^{the instructions being sought fromthe} Department, .they^{havebeen taking a solitary groundthat the} decision of^{the BombayHigh Court in the case of Hexaware} Technologies Ltd.,^{(2 supra) as also the one which has been} decided by this^{Court in thc case ol Kanakalo RavindraReddy}

82024 SCC Online Guj 4012 '2025^{SCC Online Jhar 287} ' n 12023'.^{RI-JD: 49 84-DB l}

5

ry

(l 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 Suprente Court is seized of. the matter. In addition, there are about 1200 SLps also filed arising our olthe same issue being decided by various High Courts.

To a query being put to the leamed counsel for the Revenue, they have categorically accepted the fact that there is no interim order granted by the Hon,ble Supreme Court in any of. these matters pending before it. Meanwhile, lresh writ petitions of rdentrcal nature are being piled up before this Bench on daily basis and the pendency is getting increased on matter which othenvisc has already been dealt and decidecl by this very High Court itsetf.

On the one hand, even though the order of this Court that was passed as early as on 14.09.2 023 and, more I 6 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 l4gA and under Section 148 of rhe Acr by the jurisdictiona[ Assessing Officer, rather the authorities concemed in the teeth of series ot.decisions

6

bY all the major High Courrs ln lndia are continuously still initiating proceedings under Section l48A of the Act and also initiating proceedings under Section l4g of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Act 2021.

9' Upon a query being put as to why can,t this wr.it petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravindra Reddy (l supra), learned Standing Counsel for the Income Tax Departrnent contends that those would unnecessarily burden ihe Income Tax Deparlment where they would be required to file equal number of SLps belore the Hon'ble Supreme Couft and it would be further burdening the exchequer of the Union of India. It was also the contention of the learned Standing Counsel that no prejudice would be caused to the interest of the petitioners in case if this writ petition is kept pending till the finalization of the SLps pending before the Hon,ble Supreme Court and the fact that the petitioner is already enjoying the benefit of interim protection. Nonetheless, on the earlier query of this court as to why the Income Tax Depaftment have not come out with a mechanism to issue appropriate inslructions or to rakc

appropriate steps in ensuring that proceedings under Section 14gA of the Act as also the assessment orders under Section 148 of the Act are kept in a hold in the light ofthe 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 CBDT as any such steps would have.to be taken^pan India and cannot be limited to any of these jurisdictional High Courts.

As a result of which, what we are facing is steep increase o1titigation day in and day out even though various orders have been passed by this High Court allowing writ petitions on the very same issue. The Income Tax authorities concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 151A of the Act and as a result by now, more than 600 to 700 petitions have been already got piled up before this High Court on an issue which otherwise stands squarely covered by the judgment of this Court in the case of Kanakala Ravindra Retttly ( I supla). What is also surprising is the fact that though while allowirrg the writ petitions in the case of Kanukalo Ravindra Reddy (l supra), the Division Bench while reserving the right of thc Revenue, has also protectecl the interest of the petitioners n

\ \

.,t l \

8

!

insofar as^{the liberty which was grantedto the Re venuelor} initiating fresh^{proceedingsstrictly in accordancewith the amended} provisions of^{the Act, as amended by the Finance Act' 2020and} the Finance Act,^{2021. The petitionerassesseewould be entitlcd to} challenge or^{raisethe other legal objections if the Revenueinitiates} fresh^{proceedings.The Departmenthas madeno endeavourin} availing the^{said liberty that was reserved for the Revenue'On the} contrary, they^{have been still sticking on to the stand' r'i'hich this} High Courl^{as well as many other High Courts already held to be} bad

lt appears^{that because of the aforesaidlibertythat this t{igh} Court had^{grantedpermittingthe Revenue for initiating fresh} proceedings as^{a one-timemeasurein a facelessmanner'the} Income Tax^{Department wants to takeadvantageof the sarne by} protracting^{these proceedings which wouldenablethem to meet the} limitation^{that wouldotherwise comein the way' Likewise' if the} writ petition^{is kept pending for a considerablelong periodof time} and finalty^{at a later stage if the Hon'ble Supreme Coutlcon firms} the decision^{taken by this High Coufi as also by the other High} CourtsinwhichtheSLPsarestillpending,thelncomeTax

9

Deparlmenr would get the advantage of the liberty that is other.wise protected in favour of the Revenue for initiation of fresh proceedings lrom 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 concerned. As a consequence, the Income Tax Department gets an extended period of time for initiation of fresh proceedings.

The alarming trend of docket explosion in this Court, despite the clear precedent set in Kanakala Ravindra Reddy (l supra), is a matter of grave concern. The Income Tax Department,s persistent initiation ol 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 slrategy of awaiting the Supreme court,s decision on pending SLps while continuing to initiate fresh proceedings appears to be a calculated move to buy time and crrcumvent lirnitation periods, rather than adhering to the established legal

10

.l'\i
<br>

position. Such^{conduct raises seriousquestionsaboutthe} administrative^{efficiencyand therespectforjudicial} pronouncements,^{particularly whenthis Court has already provided} a balanced^{approach by preserving both the Revenue'srightsand} assesses interests

Another^{aspect whichneeds to be considered is that in lact it} should have^{beenrealized by the Income TaxDepartmentitsell and} shouldhavefoundoutvia.mediainensuringthatproccedings under Sections^{148-4 and 148 shouldnot have been issuedin a} faceless manner,^{at least titl the Hon'bleSupreme Courtdecidethe} twelve hundred^{(1200) odd SLPswhich it is alreadyseizedof or' at} least the Income^{Tax Departmentshould have found ouisome} rernedial^{steps to ensure that whereverthe authorities intendto} initiate^{proceedingsunder Sections 148-A and148'other than in a} faceless manner,^{the proceedingsshould have been delened} without precipitating^{the matterfurtherintimating the assessee that} they shall^{initiate appropriate proceedingsonlyafter the SLP'sare} decided by^{the Hon'ble SupremeCourt on the verysame issuc'} This again,^{the IncomeTax Department,has not been able to give a} convincing reply,^{except for the fact that sucha decision iI'at all}

11

has to be taken, has to be taken lor the 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 Department contended that the Delhi High Court dismissed a writ petition of similar nature, on the one hand when the High Court is struggting to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this High Court resulting in filing of hundre<is of new writ petitions which in the long run not only aflects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these rnatters again and again on daily basis. Admittedly, in spite of the matter before the Hon,bte Supreme Court having been taken on many occasions, the Hon,ble Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the 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 Deparlment is showing a{acity by issuing notices continuously under Sections l4g_A and

'1

12

148 through the^{jurisdictional AssessingOfficerwhereas it ought} to have been only in the^{faceless manner}

In the case of BANK OF^{INDIA vs. ASSISTANT} COMMISSIONER, TNCOME^{TAXIT, on an issuewhether it was} j ustifiable on the part of the Income Tax Department^{in not} following an order passed^{by the adjudicating authorityonlyon the} ground that the appeals are^{pending,the Division Bench of the} High Court of Bombay held^{at paragraphNo.25 as under, viz.,:}

"25. Mr. Paridwalla has rightly drawn out^{attention to the} decision of this^{Court in Commissionerof lncome Tax vs' Smt'} Godavaridevi Sarafl2^{as also the recent decision of the co-} ordinate Bench of^{this Court in SampFurniture(P) Ltd. v' lTO13} of which one of^{us (Justice G.S. Kulkarni) was a member, wherein} the Court categorically^{observedthat the Revenuehavingnot} "accepted" the^judgment of the^{High Court wouldnot meanthal till} the same^{is set asidein a manner known to law, it wouldloose its} binding force.^{Referringto the decisionof theSupremeCourtin} Union of lndia vs. Kamlakshi^{FinanceCorporation Ltd'14, the} Court observed that the^{approach of the officials of Revenue of} treating decisions being^{"not acceptable" was criticizedby the} Supreme Court. ln^{such decision,following are the relevant} observations made^{by the SupremeCourt.}

" 11zOzs;^{170 taxmann.com 422 (Bombay)l}

" 1t9;81^{113 ITR 589 (Bornbav)}

'3 lzTz+1165^{taxmann.com 581/300 Taxman 452 (Bornbay)} to 1t992|taxmaffi.com 16/55 ELT 433 (SC)

13

"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 faclual malafides but with the fact lhat 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, righfly 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 vehementjy 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 Ccillectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not^{,,acceptable,,} to the department - in itself an objectionable phrase _ and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. lf this healthy

t4

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rule is not^{followed, the resultwill only be undue} harassment to^{assesses and chaosin administration} of tax laws.

We have^{dealt with this aspect at somelength'} because it has^{beensuggestedby the learned} Additional Solicitor^{General that the observations} made by the^{High Court, have been harsh on the} officers. lt is clear^{that the observations of the High} Court, seemingly^{vehement,andapparently} unpalatable to^{the Revenue, are only intendedto curb} a tendency in^{revenue matterswhich, if allowedto} become widespread,^{could result in considerable} harassment to^{the assesses-public withoutany benefit} to the Revenu;.^{We would like to say that the} department^{should take these observations in the} proper spirit- The^{observationsof the High court} should^{be kept in mindin future and the utmostregard} should be^{paid by theadiudicating authorities and the} appellate authorities^{to the requirementsof iudicial} discipline and^{theneedfor giving effect to theorders} of the higher^{appellate authorities whichare binding} on them."

1 5. What^{is worryingthis Bench more is the fact that an}

endeavour^{is being made whole heartedlyto ensurenot to generate} further litigation^{on issues which have been laid to rest by a large} number of^{High Couftsall of whomhave takena consistentstand} that tl-re action of^{tl-re IncomeTax Department being violative of the}

I

15

Finance Acl.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 Court in the case of Kankanala Ravindra Redcly (l supra) shall however be subject to the outcome of the SLPs which were fi led by the Income Tax Department and which is pending consideration befbre the Hon,ble Supreme Court.

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 Court 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 otherwise can be decided and disposed of as a covered matter.

l7 . So far as the interest of the Revenue is concemed, we are of the considered opinion that the interest of the Revenue has already been considerff and protected, as has been observed in paragraphs

\

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t

36,37 and38^{of the order which, for ready reference, is reproduced}

hereunder

rlre^{(:(ttrst'!(rtrelrlr/r} tll(rFl^{rs rrlr}

36.^{For all the aforesaid reasons'the impugned notices} issued and^{the proceedings drawnby the respondent-} Department^{isneithertenable' nor sustainable'} The notices^{so issued and theprocedure adopted being} per se illegal,^{deserves to be and are accordinglyset} aside/quashed.^{As a consequence'all the impugned} orders^{getting quashed, the consequential orders passed} by the^{respondent-Department pursuantto the notices} issued^{under Section147 and148 would alsoget} quashed and^{it is orderedaccordingly The reasonwe} are^{quashingthe consequential order is on theprinciples} that when^{the initiation of theproceedingsitself was} procedurally^{wrong,thesubsequentorders also gets} nullified^{automaticallY'}

The^{preliminary obiection raised by the petitionerrs} sustained^{andall these writ petitions stands allowedon} this^very iurisdictional^{issueSince the impugned notices} and orders^{are getting quashed. on the pointof} iurisdiction,^{we are not inclined to proceed further and} decide the^{other issuesraised by the petitioner which} stands^{reserved to be raised andcontended in an} appropriate Proceedings'

38.^{Since the Hon'ble Supreme Courthad' in the case} of Ashish^{Agarwal,supra, as aone-timemeasure} exercising^{the powers under Article 142 ofthe} Constitution^{of lndia,permittedtheRevenueto proceed} under the^{substituted provisions, and thisCourt allowing} the^{petitionsonlyon the procedural flaw'the right}

17

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 of Ashish Agarwal, supra.

We rvould only further like to make observations that since rve are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Courl in the case of Kanakala Ravindra Reddy (l supra) is subjected to challenge before the Hon'ble Supreme courl in SLp No.i574 of 2024, preferred by the Income Tax Deparlment, we make it clear that allowing of the instant writ petition is subjecl to ourcome of.the afbresaid SLp preferred by the Revenue against the decision of this Fligh Court in the case of Ksnakalo Rttvindrn Reddy (I 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 writ petition in the light of the decision of the Hon,bte Supreme Court in the pending SLp on the ver1, same issue.

(r

I 9' Accordingly, the instant writ petition stands alrowed in I'avour of the assessee so far as the issue of jurisdiction IS concerned. As a

consequence, the irnpugned notice under challenge under Sections l4g_A and I48 stands set aside/quashed.

18

The consequential^{orders, if any' also stand set aside/quashed in}

similar^{termsas have been passeCby this High Court in the case of}

Kankanaltr^{RavindraReddy(lsupra)'There shallbe no order as}

to costs.

Consequently,^{miscellaneouspetitions pending' if any' shall}

stand closed.

//TRUE COPY//

SD/- N.SRIHARI DEPUry REGISTRAR SECTION OFFICER

To,

The Ministry of^{Finance, lncome Tax Departmen} ew Delhi, Union of lndia^- 100 01 1

2 The Office of Commissioner,^{lncome TaxDepartment, Ministry of Finance,} Government of^{lndia, New Delhi - '100 011}

J TheOfficeofthelncomeTaxOfficer,Ward4('l),HyderabadlTTowers,AC Guards, Masab Tank,^{Hyderabad - 500004-}

4 The National Faceless^{Assessmentcenter,lncome Tax Department,Ministry} of Finance, Government^{of lndia, New Delhi '100 011}

One CC to SRI SHEETAL^{SRIKANTH, Advocate} [OPUC]

One CC to Ms.^{P.SAPNA REDDY, Sr. SC FOR lT [OPUC]}

One CC to SRI GADI^{PRAVEENKUMAR, DEPUTY SOLICITOR GENERAL} OFlf.f Orn, Uigh Court^{for the Stateof Telangana at Hyderabad [OPUC]}

B. TWo CD Copies

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HIGH COURT

DATED:02107 t2025

ORDER

WP.No.18702 of 2O2S

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ALLOWING THE WRIT PETITION,

WITHOUT COSTS

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