PROPHET BAJINDER SINGH MINISTRY vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

The petitioner, an assessee, challenged a notice dated 26.08.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, initiating reassessment proceedings. The petitioner also challenged consequential proceedings. The High Court noted that similar issues were decided in previous writ petitions, including CWP No. 21509 of 2023 titled Jasjit Singh vs. Union of India and others, decided on 19.07.2024, and CWP No. 15745 of 2024 titled Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. The Court was informed that the present petition involved similar facts and legal questions. The revenue was represented by senior standing counsel.

Held

The High Court allowed the writ petition. It held that instructions issued by the Board cannot override statutory provisions or make them otiose. Legislative enactments and their implications must be followed mandatorily. The Court found that the authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. Instructions can only supplement statutory provisions for implementation. In view of the law laid down by coordinate benches, notices issued under Section 148 of the Act and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B were found to be contrary to the Act and accordingly 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 interim order stood merged with the final order.

Key Issues

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent reassessment proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, are valid for want of jurisdiction. Assessee's contention: The assessee argued that the proceedings were contrary to the provisions of the Income Tax Act, 1961, and instructions issued by the Income Tax Department. The assessee relied on the decisions of coordinate benches in similar matters. Revenue's contention: The revenue, through its senior standing counsel, accepted notice and did not advance separate arguments, indicating agreement with the position taken by the coordinate benches in the cited cases.