TARANJIT SINGH vs. DEPUTY COMMISSIONER OF INCOME TAX

Facts

The petitioner, Taranjit Singh, challenged a notice dated 11.01.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and consequential assessment proceedings. The petitioner argued that the proceedings were initiated without jurisdiction, citing a previous judgment by a Coordinate Bench in Jasjit Singh vs. Union of India and others. The revenue, represented by the Income Tax Department, accepted notice. The High Court noted that similar issues had been decided by other Coordinate Benches in related cases. The core of the dispute revolved around the validity of faceless assessment proceedings initiated under Section 144B of the Act.

Held

The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, and the consequential proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, were contrary to the provisions of the Act and the instructions issued by the JAO. The Court relied on its previous decision in Jasjit Singh vs. Union of India and others, which held that circulars or instructions cannot override statutory provisions and that authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship to assessees. The Court found that the faceless assessment provisions were not followed, leading to a lack of jurisdiction. Consequently, the notices and all consequential proceedings were set aside. The revenue was granted liberty to follow the procedure laid down under the Act and proceed accordingly, if advised. The Court also noted that the interim orders stood merged with the present order.

Key Issues

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential 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 and the instructions issued by the JAO. Assessee's Contention: The assessee contended that the proceedings were initiated without jurisdiction, relying on the judgment in Jasjit Singh vs. Union of India and others, which held that instructions by the Board cannot override statutory provisions and that faceless assessment procedures must be followed. Revenue's Contention: The revenue did not record any specific arguments against the assessee's contention in the judgment. However, they accepted notice and were represented by counsel.