Rakesh Reddy Patil Vs Union of India (Telangana High Court)
Conclusion: Notices issued to a taxpayer on the ground that the Income Tax Department failed to issue them in compliance with the mandatory faceless assessment procedure, thus disregarding binding judicial precedents that have adjudicated on the matter was invalid.
Held: Assessee had filed the writ petition against the Union of India and its tax authorities, challenging the legality of notices issued under Sections 148A and 148 for the assessment year 2021–2022. He contended that the notices and consequential proceedings purported by the department were violative of Section 151A as amended by the Finance Act, 2021 which mandated that such notices must be issued in a faceless manner. It was submitted that the issue was no longer res integra, alluding to the Telangana High Court’s decision in Kanakala Ravindra Reddy v. Income-Tax Officer (2023), where the Court had quashed similar notices for non-compliance with the faceless regime. Revenue did not dispute that the notices had been issued in a non-faceless arrangement, but argued that Supreme Court was privy of the matter and a batch of pending Special Leave Petitions were pending adjudication before the Apex Court. It was held that despite numerous unambiguous judicial pronouncements by the Telangana High Court and several other High Courts across the country barring the issuance of non-faceless notices, the Income Tax Department has continued to pursue the same process, leading to a surge in litigation on an issue that has already settled by judicial precedents. The Bench also cited the Bombay High Court’s decision in Bank of India v. Assistant Commissioner, Income Tax (2025) where the Court reiterated the need for the department to exercise judicial discipline and abide by matters settled by a higher court. Concluding, the Court allowed the writ petition and quashed the impugned notices and all consequential proceedings, clarifying that such disposal was subject to the outcome of the pending Special Leave Petitions before the Supreme Court.
