PUNAM RANI vs. DEPUTY COMMISSIONER OF INCOME TAX AND OTHERS

Facts

The petitioner, Punam Rani, filed a writ petition challenging a notice dated 31.03.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and all consequential proceedings. The petitioner argued that the assessment proceedings were initiated without jurisdiction, particularly in light of the faceless assessment scheme. The revenue, represented by the Deputy Commissioner of Income Tax and others, accepted notice. The High Court noted that similar issues had been decided by coordinate benches in previous cases, specifically Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, both decided on 19.07.2024. The court was asked to decide if the assessment proceedings were validly initiated.

Held

The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, and the subsequent proceedings initiated under the faceless assessment scheme, without conducting the assessment as envisaged by Section 144B (7 & 8) of the Act, 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 instructions by the Board, even if issued under Sections 119 and 120 of the Act, could not override statutory provisions or make them otiose. Authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to assessees. Circulars and instructions should supplement statutory provisions and aid implementation. Therefore, the notice dated 31.03.2024 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. The writ petition was allowed, and interim orders 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 under the faceless assessment scheme, without conducting the assessment as envisaged by Section 144B of the Act, are valid and have jurisdiction. The assessee contended that the assessment proceedings were initiated without jurisdiction. The revenue did not record any specific arguments in the judgment, but the court noted that the senior standing counsel accepted notice on behalf of the respondents/Income Tax Department. The court's decision was based on previous judgments of coordinate benches, which had dealt with the interplay between statutory provisions, circulars issued by the Board, and the faceless assessment scheme.