G S MAJESTIC DEVELOPERS PVT LTD vs. DEPUTY COMMISSIONER OF INCOME TAX

Facts

The petitioner, M/s. G.S. Majestic Developers Private Limited, challenged a notice dated 27.03.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The petitioner argued that these proceedings were initiated without jurisdiction and were contrary to the Act and its provisions. The revenue, represented by the Income Tax Department, accepted notice. The High Court noted that the issue was similar to previously decided cases, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) and CWP No. 15745 of 2023 (Jatinder Singh Bhangu vs. Union of India and others), decided on 19.07.2024 and 29.07.2024 respectively. The Court was asked to decide if the faceless assessment proceedings initiated were valid.

Held

The High Court held that notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and the subsequent proceedings initiated without conducting the assessment as envisaged under Section 144B of the Act, were found to be contrary to the provisions of the Act, 1961, and therefore without jurisdiction. The Court relied on its previous decisions in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. The reasoning was that instructions by the Board could not override statutory provisions or make them otiose, and legislative enactments having financial implications must be followed strictly. The Court stated that authorities cannot usurp legal provisions to their own satisfaction and convenience, causing hardship and confusion. Instructions and circulars can only supplement statutory provisions. Consequently, the notices dated 27.03.2023, 16.03.2023, 20.03.2024, and 30.03.2023, along with all consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, if so advised. The writ petition was allowed.

Key Issues

1. Whether the notices issued by the Joint Administrative Officer (JAO) under Section 148 of the Income Tax Act, 1961, and the subsequent faceless assessment proceedings initiated without conducting the assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act, 1961 and thus without jurisdiction? (Mixed question of law and fact, relating to Section 148 and Section 144B of the Income Tax Act, 1961). Assessee's Contentions: - The proceedings initiated under Section 148 and the subsequent faceless assessment were contrary to the provisions of the Income Tax Act, 1961, particularly Section 144B, and were therefore without jurisdiction. - The Court's previous decisions in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India were binding. Revenue's Contentions: - The revenue did not explicitly record any arguments against the assessee's position. Mr. Saurabh Kapoor, Senior Standing Counsel, accepted notice on behalf of the respondents/Income Tax Department. The Court noted that both counsel were 'ad idem' that the issue involved in the present petition stood finally examined and concluded by this Court in the aforementioned cases.