RAJESH KUMAR SONI vs. PRINCIPAL COMMISSIONER OF INCOME TAX

Facts

The petitioner, Rajesh Kumar, challenged a notice dated 31.03.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential proceedings. The petitioner argued that the notice and proceedings were invalid. The revenue, represented by the Income Tax Department, accepted notice. The High Court noted that similar issues had been decided by its Coordinate Benches in previous cases, specifically Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, both decided on 19.07.2024. These earlier judgments dealt with the validity of faceless assessments and notices issued under Section 148 in light of specific circulars and statutory provisions.

Held

The High Court allowed the writ petition. It held that instructions issued by the Board under Sections 119 and 120 of the Income Tax Act, 1961, cannot override statutory provisions or render them obsolete. The Court reiterated the view of its Coordinate Bench that legislative enactments with financial implications must be followed mandatorily. The Court found that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions and aid in their implementation. Consequently, notices issued under Section 148 of the Act, and proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B, were found to be contrary to the provisions of the Act and were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act if so advised. The interim orders stood merged with the present order.

Key Issues

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings initiated without conducting personal hearings are valid, considering the provisions of Sections 119, 120, and 144B of the Act, and relevant Board instructions? (Question of law and mixed fact and law). Assessee's Contention: The petitioner argued that the notice and consequential proceedings were invalid. While not explicitly detailed, the petitioner's stance implicitly aligns with the reasoning in the cited cases, suggesting that the faceless assessment procedures, as applied, might have violated statutory provisions or caused hardship. Revenue's Contention: The revenue, through the Senior Standing Counsel, accepted notice. No specific arguments were recorded for the revenue in this judgment, but the counsel was present and accepted notice.