ANJU CHADHA vs. INCOME TAX OFFICER WARD 3 (1)

Facts

The petitioner, Anju Chadh, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The petitioner argued that these notices and proceedings were initiated without adhering to the mandatory procedures, particularly concerning faceless assessments as envisaged under Section 144B of the Act. The respondent, the Income Tax Department, was represented by its counsel. The case was heard by the High Court of Punjab and Haryana at Chandigarh. The court noted that similar issues had been decided in previous writ petitions, specifically Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, both decided on July 9, 2024.

Held

The Tribunal held that instructions issued by the Joint Administrative Officer (JAO) under Section 119 and 120 of the Income Tax Act, 1961, and the provisions of Section 144B (7 & 8), could not override statutory provisions or be exercised to make them obsolete. The court found that the notices issued under Section 148 of the Act and the subsequent proceedings initiated without conducting faceless assessments as envisaged under Section 144B were contrary to the provisions of the Act. Consequently, the notices dated 25.04.2024, 23.03.2023, 16.03.2023, 30.03.2023, and the order dated 30.03.2023 were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act and proceed accordingly, if advised. The operative direction was to allow the writ petition and set aside the impugned notices and proceedings.

Key Issues

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings initiated under Section 144B of the Act, were validly conducted without adhering to statutory provisions and relevant circulars, particularly concerning the jurisdiction and procedure for faceless assessments. Assessee's Contention: The petitioner contended that the notices and proceedings were contrary to the Act and the principles of natural justice, as they were initiated without proper jurisdiction and adherence to the faceless assessment scheme. The petitioner relied on the principle that instructions by the Board could not override statutory provisions or render them otiose. Revenue's Contention: The revenue's counsel accepted notice and did not present any specific arguments against the petitioner's claims, but rather acknowledged that the issue had been decided by coordinate benches.