BALJINDER KAUR vs. PR COMMISSIONER OF INCOME TAX, JALANDHAR AND ANOTHER

Facts

The petitioner, Baljinder Kaur, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B. The petitioner argued that these proceedings, particularly those conducted without a faceless assessment as envisaged by Section 144B, were contrary to the provisions of the Act and circulars issued by the CBDT. The assessment year(s) are not explicitly stated, nor is the specific amount in dispute. The procedural history involves the issuance of notices by the Jurisdictional Assessing Officer (JAO) and the subsequent challenge by the petitioner. The High Court considered prior judgments on similar issues.

Held

The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B, without conducting a faceless assessment as envisaged by the Act, were found to be contrary to the provisions of the Act. The Court agreed with the view taken by a Coordinate Bench that circulars or instructions issued by the Board cannot override statutory provisions or be issued to make them otiose. Legislative enactments with financial implications must be followed strictly. The Court found that the notices dated 22.03.2024, 16.03.2023, 23.03.2023, 20.03.2024, and 30.03.2023, issued by the JAO, 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. The ratio decidendi is that faceless assessment provisions, when mandated, cannot be bypassed, and any deviation renders the proceedings invalid.

Key Issues

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and proceedings initiated thereafter under Section 144B, without conducting a faceless assessment, are valid and in accordance with the law? (Question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that the proceedings were contrary to the provisions of the Act and circulars, particularly concerning faceless assessments. They relied on the principle that instructions by the Board could not override statutory provisions or make them obsolete, and that legislative enactments with financial implications must be followed strictly. Revenue's Contention: The revenue, represented by the Senior Standing Counsel, accepted notice. The judgment does not explicitly record specific arguments made by the revenue against the petitioner's claims, but it notes that the counsel were 'ad idem' that the issue was concluded by prior judgments.