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Breach of Judicial Discipline-Misconduct-Contemptuous.

11. In the case of Union of India Vs. Kamlakshmi Finance Corpn. Ltd. 1992 (Suppl) SC-C 443 (para 6) Hon'ble Supreme Court upheld the observation of Hon'ble High Court on the conduct of an Assistant Collector and the harassment to the assessee caused by the failure of these officers to give effect to the order of authorities higher to them in the appellate hierarchy and has held as under:

"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 mala fides but with the fact that the officers, in reaching 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 criticised 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 emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate 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 assessees and chaos in administration of tax laws."

16. Law laid down in the aforesaid judgments has been reiterated by the Hon'ble Supreme Court in the case of Commissioner of Income Tax versus Ralson Industries Ltd 2007 (2) SCC 326 ( para 9).

17. In the case of Union of India Versus Namit Sharma 2013 (1) SCC 745 ( para 108.14) Hon'ble Supreme Court explained the precedent and judicial discipline and held as under:-

"108.14. Under the scheme of the Act of 2005, it is clear that the orders of the Commissions are subject to judicial review before the High Court and then before the Supreme Court of India. In terms of Article 141 of the Constitution, the judgments of the Supreme Court are law of the land and are binding on all courts and tribunals. Thus, it is abundantly clear that the Information Commission is bound by the law of precedence i.e. judgments of the High Court and the Supreme Court of India. In order to maintain judicial discipline and consistency in the functioning of the Commission, we direct that the Commission shall give appropriate attention to the doctrine of precedence and shall not overlook the judgments of the courts dealing with the subject and principles applicable, in a given case. It is not only the higher court's judgments that are binding precedents for the Information Commission, but even those of the larger Benches of the Commission should be given due acceptance and enforcement by the smaller Benches of the Commission. The rule of precedence is equally applicable to intra-court appeals or references in the hierarchy of the Commission".

(a) Judicial discipline and propriety are the two significant facets of administration of justice. 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 or that 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 assessees and chaos in administration of tax laws.

25. In view of the principles settled by Hon'ble Supreme Court and by High Courts in the judgments, briefly discussed above, we direct the respondents to maintain judicial discipline and follow the doctrine of binding precedent and be careful in future, having due regard to the authorities of the Court, keeping in mind the judicial propriety and discipline.

26. The impugned notice dated 31.03.2021 issued on 01.04.2021 under Section 148 of the Income Tax Act, 1961, being without jurisdiction, cannot be sustained and is hereby quashed. Consequently, the order dated 19.03.2022 and the Reassessment Order dated 29.03.2022 for the Assessment Year 2013-14 can also not be sustained and are hereby quashed inasmuch as, the jurisdictional notice itself was without jurisdiction.