AMARJIT GANDHI vs. PR COMMISSIONER OF INCOME TAX LUDHIANA AND ANOTHER

Facts

The petitioner, Amarjit Gandhi, filed a writ petition challenging a notice dated 22.03.2024 issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent consequential proceedings. The revenue, represented by the Principal Commissioner of Income Tax, Patiala, was the respondent. The assessment year(s) are not explicitly stated but relate to reassessment proceedings. The core of the dispute revolves around the validity of reassessment notices issued under Section 148, particularly when faceless assessment procedures under Section 144B were mandated. The petition was filed in the High Court of Punjab and Haryana at Chandigarh.

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 without conducting faceless assessment as envisaged under Section 144B, were found to be contrary to the provisions of the Act. 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 circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be followed strictly. The Court emphasized that the JAO's notices and orders allowing discretionary powers to usurp legal provisions for their convenience cause hardship and confusion. Therefore, the notice dated 22.03.2024 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 if so advised. All pending applications were also disposed of.

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, are valid and not contrary to the provisions of the Act. Assessee's Contention: The assessee implicitly argues that the notice and proceedings are invalid because they bypass the mandatory faceless assessment procedure. The judgment references prior decisions that found such notices contrary to the Act. Revenue's Contention: The revenue's counsel accepted notice and did not present a distinct argument against the assessee's position, but rather agreed that the issue had been concluded by this Court in prior judgments. The judgment notes that the revenue's counsel was present and accepted notice.