PROPHET BAJINDER SINGH MINISTRY vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

The petitioner, represented by Mr. Atul Mandhar, filed a writ petition challenging a notice dated 30.08.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential assessment proceedings. The revenue, represented by Mr. Yogesh Putney, accepted notice. The High Court noted that the issue was identical to previously decided cases. Specifically, the Court referred to its own decision in CWP-2024 titled Jasjit Singh vs. Union of India and others, decided on 19.07.2024, and a Coordinate Bench decision in CWP No.15745 of 2023 titled Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. The Court observed that in Jasjit Singh, it had held that circulars or instructions from the Board could not override statutory provisions or make them obsolete.

Held

The High Court held that instructions issued by the Board (Central Board of Direct Taxes) cannot override statutory provisions or make them obsolete. Legislative enactments must be followed mandatorily. The Court affirmed that by exercising powers under Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), the authorities cannot usurp legal provisions to their own satisfaction and convenience, causing hardship and confusion to assessees. The Court found that notices issued under Section 148 of the Act, 1961, and subsequent proceedings initiated without conducting the faceless assessment as envisaged under Section 144B, were contrary to the provisions of the Act. Consequently, the notices dated 28.02.2023, 16.03.2023, 20.03.2023, 30.03.2023, and 30.03.2024 were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act, 1961, and proceed accordingly if so advised. The writ petition was allowed, and 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 proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, are valid and not contrary to the provisions of the Act. Assessee's Contention: The assessee argued, by relying on the precedent set in Jasjit Singh vs. Union of India and others, that instructions by the Board cannot override statutory provisions and that legislative enactments must be followed mandatorily. The assessee further contended that authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion, and that faceless assessment provisions under Section 144B were not followed. Revenue's Contention: The revenue's counsel accepted notice and did not present any arguments against the assessee's position, implicitly agreeing with the submissions made in the cited precedent.