Telangana High Court
Gayoor Nasreen vs Assessment Unit, on 11 July, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy
HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA
WRIT PETITION NO.19984 OF 2025
ORDER:
(per Hon’ble Sri Justice P.Sam Koshy)
Heard Mr. V.V.S.Ankith, learned counsel for the petitioner and
Ms.B.Sapna Reddy, learned Senior Standing Counsel for the Income
Tax Department appearing for the respondent Nos.1 to 3. Perused the
record.
2. This is a writ petition where the proceedings are either
challenged to the notices which were issued under Section 148A and
148 of the Income Tax Act, 1961 (for short ‘the Act’) or the assessment
orders those have been passed under Section 147 of the Act which
have been assailed.
3. This writ petition is being taken up today only on one of the
grounds, that the notices issued under Section 148A of the Act and the
subsequent initiation of proceedings under Section 148 of the Act by
the jurisdictional Assessing Officer, whereas in terms of the
amendment that was brought to the Income Tax Act by way of Finance
Act, 2021 w.e.f., 01.04.2021 onwards, proceedings under Section 148A
of the Act as also under Section 148 of the Act ought to have also been
issued and proceeded in a faceless manner.
2
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 Section 148 of the Act not being issued in a
faceless manner, have already been dealt with and decided by this
Court in the case of KANKANALA RAVINDRA REDDY vs.
INCOME-TAX OFFICER 1 decided on 14.09.2023 whereby a batch of
writ petitions were allowed and the proceedings initiated under Section
148A as also under Section 148 of the Act were held to be bad with
consequential reliefs on the ground of it being in violation of the
provisions of Section 151A of the Act read with Notification 18/2022
dated 29.03.2022. The said judgment passed by this Court has also been
subsequently followed in a large number of writ petitions which were
allowed on similar terms.
5. Down the line, we find that the same issue has also been decided
against the Revenue by various High Courts i.e., by the Bombay High
Court in the case of HEXAWARE TECHNOLOGIES LTD., vs.
ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS 2,
Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION
OF INDIA 3, Punjab and Haryana High Court in the case of JATINDER
1
[(2023) 156 taxmann.com 178 (Telangana)]
2
[2024] 464 ITR 430 (Bom)
3
[(2024) 156 taxmann.com 478 (Gauhati)]
3
SINGH BANGU vs. UNION OF INDIA 4, and Telangana High Court
in the case of SRI VENKATARAMANA REDDY PATLOOLA vs.
DEPUTY COMMISSIONER OF INCOME TAX 5 where the issue was
in respect of international taxation, Bombay High Court in the case of
ABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICER,
INTERNATIONAL TAXATION 6 which is again on international
taxation and central circle, High Court of Himachal Pradesh in the case
of GOVIND SINGH vs. INCOME TAX OFFICER 7, Gujarat High
Court in the case of MANSUKHBHAI DAHYABHAI RADADIYA vs.
INCOME TAX OFFICER, WARD 3(3)(5) 8, Jharkand High Court in the
case of SHYAM SUNDAR SAW vs. UNION OF INDIA 9, Rajasthan
High Court in the case of SHARDA DEVI CHHAJER vs. INCOME
TAX OFFICER & ANOTHER and batch of writ petitions 10 which stood
decided on 19.03.2024. Similar views have also been taken by the
Division Bench of Calcutta High Court in the case of GIRDHAR
GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 of
2023), decided on 25.09.2024.
4
[(2024) 165 taxmann.com 115 (Punjab & Haryana)]
5
[2024) 167 taxmann.com 411 (Telangana)]
6
[2024) 166 taxmann.com 679 (Bombay)]
7
[2024) 165 taxmann.com 113 (Himachal Pradesh)]
8
2024 SCC OnLine Guj 4012
9
2025 SCC OnLine Jhar 287
10
[2023: RJ-JD:4984-DB]
4
6. Even though the same issue having been decided by a large
number of High Courts, we are still confronted with large filing of
identical matters on daily basis ranging between 5 to 10 writ petitions.
That upon the instructions being sought from the Department, they
have been taking a solitary ground that the decision of the Bombay
High Court in the case of Hexaware Technologies Ltd., (2 supra) as also
the one which has been decided by this Court in the case of Kanakala
Ravindra Reddy (1 supra) has been subjected to challenge in a Special
Leave Petition i.e., SLP No.3574 of 2024 before the Hon’ble Supreme
Court and the Hon’ble Supreme Court is seized of the matter.
In addition, there are about 1200 SLPs also filed arising out of the same
issue being decided by various High Courts.
7. To a query being put to the learned counsel for the Revenue, they
have categorically accepted the fact that there is no interim order
granted by the Hon’ble Supreme Court in any of these matters pending
before it. Meanwhile, fresh writ petitions of identical nature are being
piled up before this Bench on daily basis and the pendency is getting
increased on matter which otherwise has already been dealt and
decided by this very High Court itself.
8. On the one hand, even though the order of this Court that was
passed as early as on 14.09.2023 and more 16 months have lapsed, till
5
date, we do not find any remedial steps having been taken by the
Income Tax Department to take appropriate steps to either hold back
issuance of notice under Section 148A and under Section 148 of the Act
by the jurisdictional Assessing Officer, rather the authorities concerned
in the teeth of series of decisions by all the major High Courts in India
are continuously still initiating proceedings under Section 148A 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 Finance Act, 2020 as also the Finance Act 2021.
9. 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 of Kanakala Ravindra Reddy (1 supra), learned Standing Counsel
for the Income Tax Department contends that those would
unnecessarily burden the Income Tax Department where they would be
required to file equal number of SLPs before the Hon’ble Supreme
Court 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.
6
Nonetheless, on the earlier query of this Court as to why the Income
Tax Department have not come out with a mechanism to issue
appropriate instructions or to take appropriate steps in ensuring that
proceedings under Section 148A of the Act as also the assessment
orders under Section 148 of the Act are kept in a hold in the light of the
decisions decided by the various High Courts, it was submitted by the
learned 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.
10. As a result of which, what we are facing is steep increase of
litigation day in and day out even though various orders have been
passed by this High Court allowing writ petitions on the very same
issue. The Income Tax authorities concerned are still even now in 2025
also initiating proceedings in contravention to the provisions of Section
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 Reddy (1 supra). What is also
surprising is the fact that though while allowing the writ petitions in the
case of Kanakala Ravindra Reddy (1 supra), the Division Bench while
reserving the right of the Revenue, has also protected the interest of the
7
petitioners insofar as the liberty which was granted to the Revenue for
initiating fresh proceedings strictly in accordance with the amended
provisions of the Act, as amended by the Finance Act, 2020 and the
Finance Act, 2021. The petitioner assessee would be entitled to
challenge or raise the other legal objections if the Revenue initiates fresh
proceedings. The Department has made no endeavour in availing the
said liberty that was reserved for the Revenue. On the contrary, they
have been still sticking on to the stand, which this High Court as well as
many other High Courts already held to be bad.
11. It appears that because of the aforesaid liberty that this High
Court had granted permitting the Revenue for initiating fresh
proceedings as a one-time measure in a faceless manner, the Income
Tax Department wants to take advantage of the same by protracting
these proceedings which would enable them to meet the limitation that
would otherwise come in the way. Likewise, if the writ petition is kept
pending for a considerable long period of time and finally at a later
stage if the Hon’ble Supreme Court confirms the decision taken by this
High Court as also by the other High Courts in which the SLPs are still
pending, the Income Tax Department would get the advantage of the
liberty that is otherwise protected in favour of the Revenue for initiation
of fresh proceedings from the disposal of these matters at a much later
8
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.
12. The alarming trend of docket explosion in this Court, despite the
clear precedent set in Kanakala Ravindra Reddy (1 supra), is a matter
of grave concern. The Income Tax Department’s persistent initiation of
fresh proceedings, disregarding the established judicial
pronouncements, has led to an unprecedented surge in litigation with
over 600-700 petitions piling up on the same issue. This deliberate
approach not only undermines the principle of judicial precedent but
also strains the judicial resources unnecessarily. The Department’s
strategy of awaiting the Supreme Court’s decision on pending SLPs
while continuing to initiate fresh proceedings appears to be a calculated
move to buy time and circumvent limitation periods, rather than
adhering to the established legal position. Such conduct raises serious
questions about the administrative efficiency and the respect for judicial
pronouncements, particularly when this Court has already provided a
balanced approach by preserving both the Revenue’s rights and
assesses interests.
9
13. Another aspect which needs to be considered is that in fact it
should have been realized by the Income Tax Department 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 least till the Hon’ble Supreme Court decide the twelve
hundred (1200) odd SLPs which it is already seized of or, at least the
Income Tax Department should have found out some remedial steps to
ensure that wherever the authorities intend to initiate proceedings
under Sections 148-A and 148, other than in a faceless manner, the
proceedings should have been deferred without precipitating the matter
further intimating the assessee that they shall initiate appropriate
proceedings only after the SLP’s are decided by the Hon’ble Supreme
Court on the very same issue. This again, the Income Tax Department,
has not been able to give a convincing reply, except for the fact that
such a decision if at all has to be taken, has to be taken for the whole of
India, and which otherwise has to be by way of a policy decision and
that too at the level of Central Board of Direct Taxes. Though the
learned Standing Counsel for the Income Tax Department contended
that the Delhi High Court dismissed a writ petition of similar nature, on
the one hand when the High Court is struggling to reduce its pendency,
such notices which are under challenge in this writ petition are forcing
the assessee to knock the doors of this High Court resulting in filing of
10
hundreds of new writ petitions which in the long run not only affects
the disposal of the writ petitions but also consumes substantial time of
the Bench in hearing these matters again and again on daily basis.
Admittedly, in spite of the matter before the Hon’ble Supreme Court
having been taken on many occasions, the Hon’ble Supreme Court
which is seized of the matter has been reluctant in granting any interim
protection to the Income Tax Department. Yet, the authorities
concerned at the State level are not ready to accept the verdict passed
by a majority of High Courts of different States on the same issue; and
to make things further worse, the Income Tax Department is showing
audacity by issuing notices continuously under Sections 148-A and 148
through the jurisdictional Assessing Officer whereas it ought to have
been only in the faceless manner.
14. In the case of BANK OF INDIA vs. ASSISTANT
COMMISSIONER, INCOME TAX 11, on an issue whether it was
justifiable on the part of the Income Tax Department in not following an
order passed by the adjudicating authority only on the ground that the
appeals are pending, the Division Bench of the High Court of Bombay
held at paragraph No.25 as under, viz., :
11
[(2025) 170 taxmann.com 422 (Bombay)]
11“25. Mr. Paridwalla has rightly drawn out attention to the decision of
this Court in Commissioner of Income Tax vs. Smt. Godavaridevi
Saraf 12 as also the recent decision of the co-ordinate Bench of this Court
in Samp Furniture (P) Ltd. v. ITO 13 of which one of us (Justice G.S.
Kulkarni) was a member, wherein the Court categorically observed that
the Revenue having not “accepted” the judgment of the High Court
would not mean that till the same is set aside in a manner known to law,
it would loose its binding force. Referring to the decision of the Supreme
Court in Union of India vs. Kamlakshi Finance Corporation Ltd. 14, the
Court observed that the approach of the officials of Revenue of treating
decisions being “not acceptable” was criticized by the Supreme Court. In
such decision, following are the relevant observations made by the
Supreme Court.
“6. Sri Reddy is perhaps right in saying that the officers were
not actuated by any mala fides in passing the impugned
orders. They perhaps genuinely felt that the claim of the
assessee was not tenable and that, if it was accepted, the
Revenue would suffer. But what Sri Reddy overlooks is that
we are not concerned here with the correctness or otherwise
of their conclusion or of any factual malafides but with the
fact that the officers, in reaching in their conclusion, by-
passed two appellate orders in regard to the same issue
which were placed before them, one of the Collector
(Appeals) and the other of the Tribunal. The High Court has,
in our view, rightly criticized this conduct of the Assistant
Collectors and the harassment to the assessee caused by the
failure of these officers to give effect to the orders of
authorities higher to them in the appellate hierarchy. It
cannot be too vehemently emphasized that it is of utmost
importance that, in disposing of the quasijudicial issues12
[1978] 113 ITR 589 (Bombay)
13
[2024] 165 taxmann.com 581/300 Taxman 452 (Bombay)
14
[1992] taxmann.com 16/55 ELT 433 (SC)
12before them, revenue officers are bound by the decisions of
the appellate authorities. The order of the Appellte Collector
is binding on the Assistant Collectors working within his
jurisdiction and the order of the Tribunal is binding upon the
Assistant Collectors and the Appellate Collectors who
function under the jurisdiction of the Tribunal. The
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. If this healthy rule is not followed, the
result will only be undue harassment to assesses and chaos in
administration 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. It is clear that the observations of
the High Court, seemingly vehement, and apparently
unpalatable to the Revenue, are only intended to curb a
tendency in revenue matters which, if allowed to become
widespread, could result in considerable harassment to the
assesses-public without any benefit to the Revenue. We
would like to say that the department should take these
observations in the proper spirit. The observations of the
High Court should be kept in mind in future and the utmost
regard should be paid by the adjudicating authorities and the
appellate authorities to the requirements of judicial discipline
and the need for giving effect to the orders of the higher
appellate authorities which are binding on them.”
13
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 laid to rest by a large number of High Courts
all of whom have taken a consistent stand that the action of the Income
Tax Department being violative of the Finance Act, 2020 and Finance
Act, 2021. 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 Reddy (1 supra) shall
however be subject to the outcome of the SLPs which were filed by the
Income Tax Department and which is pending consideration before the
Hon’ble Supreme Court.
16. In the given facts and circumstances, this Bench is of the
considered opinion that unless and until we do not timely dispose of
matters which are squarely covered by the decision of this 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.
14
17. So far as the interest of the Revenue is concerned, we are of the
considered opinion that the interest of the Revenue has already been
considered and protected, as has been observed in paragraphs 36, 37
and 38 of the order which, for ready reference, is reproduced
hereunder:
“36. For all the aforesaid reasons, the impugned notices issued
and the proceedings drawn by the respondent-Department is
neither tenable, nor sustainable. The notices so issued and 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 respondent-Department pursuant to the 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 jurisdictional issue. Since the impugned notices 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 petitioner which stands reserved to be raised and contended
in an appropriate proceedings.
38. Since the Hon’ble Supreme Court had, in the case
of Ashish Agarwal, supra, as a one-time measure exercising the
powers under Article 142 of the Constitution of India,
permitted the Revenue to proceed under the substituted
provisions, and this Court allowing the petitions only on the
15procedural flaw, the right 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.”
18. We would only further like to make observations that since we
are inclined to dispose of the instant writ petition, conscious of the fact
that the earlier order of this High Court in the case of Kanakala
Ravindra Reddy (1 supra) is subjected to challenge before the Hon’ble
Supreme Court in SLP No.3574 of 2024, preferred by the Income Tax
Department, we make it clear that allowing of the instant writ petition
is subject to outcome of the aforesaid SLP preferred by the Revenue
against the decision of this High Court in the case of Kanakala
Ravindra Reddy (1 supra). This, in other words, would mean that either
of the parties, if they so want, may move an appropriate petition
seeking revival of this writ petition in the light of the decision of the
Hon’ble Supreme Court in the pending SLP on the very same issue.
19. Accordingly, the instant Writ Petition stands allowed in favour of
the assessee so far as the issue of jurisdiction is concerned. As a
consequence, the impugned notice under challenge under Sections 148-
A and 148 stands set aside/quashed. The consequential orders, if any,
also stand set aside/quashed in similar terms as have been passed by
16
this High Court in the case of Kankanala Ravindra Reddy (1 supra).
There shall be no order as to costs.
Consequently, miscellaneous petitions pending, if any, shall
stand closed.
_______________________________
P.SAM KOSHY, J
________________________________
NARSING RAO NANDIKONDA, J
Date: 11.07.2025
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HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
HON’BLE SRI JUSTICE NARSING RAO NANDIKONDA
WRIT PETITION NO.19984 OF 2025
Date:11.07.2025
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