RAJESH KUMAR SONI vs. CHIEF COMMISSIONER OF INCOME TAX

Facts

The petitioner, Rajesh Kumar, challenged a notice dated 07.04.2023 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under faceless assessment as envisaged by Section 144B. The petitioner argued that these proceedings were contrary to the provisions of the Act and the instructions issued by the Board. The Revenue, represented by the Income Tax Department, accepted notice. The High Court noted that similar issues had been decided by coordinate benches in previous writ petitions. The assessment year(s) are not explicitly stated but the notices are dated in 2023 and 2024.

Held

The High Court allowed the writ petition. It held that notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under faceless assessment as envisaged by Section 144B, were found to be contrary to the provisions of the Act. The Court relied on the decision of a Coordinate Bench in Jasjit Singh vs. Union of India and others, which held that circulars or instructions by the Board cannot override statutory provisions or make them obsolete. The Court reiterated that legislative enactments with financial implications must be followed strictly and that authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship to assessees. Therefore, the notices and all consequential proceedings were set aside for want of jurisdiction. The Revenue was granted liberty to follow the procedure laid down under the Act and proceed accordingly, if so advised. Any pending applications were also disposed of.

Key Issues

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and proceedings initiated thereafter under faceless assessment as envisaged by Section 144B, were contrary to the provisions of the Act and therefore without jurisdiction. Assessee's Contention: The petitioner argued that the proceedings were contrary to the provisions of the Income Tax Act, 1961, and the instructions issued by the Board, implying a lack of jurisdiction. The petitioner relied on the principle that instructions by the Board cannot override statutory provisions or make them obsolete, and that legislative enactments with financial implications must be followed strictly. The petitioner also cited the judgment in Jasjit Singh vs. Union of India and others, decided on 19.07.2024, and Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024, by a Coordinate Bench. Revenue's Contention: The revenue did not present any arguments against the petitioner's contentions, as indicated by the court's observation that the counsel for the revenue was ad idem with the petitioner's counsel regarding the issue being concluded by prior judgments.