BALDEV SINGH vs. INCOME TAX OFFICER AND OTHERS

Facts

The petitioner, Baldev Singh, challenged notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings, including those under Section 144B, before the High Court of Punjab and Haryana. The petitioner argued that these notices and proceedings were vitiated due to a lack of jurisdiction and non-compliance with the faceless assessment scheme. The revenue, represented by the Income Tax Department, accepted notice. The High Court considered previous judgments by its coordinate benches in similar matters, specifically Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, which dealt with the validity of notices and faceless assessment procedures. The dispute revolved around the procedural correctness of the assessment initiated against the petitioner.

Held

The High Court allowed the writ petition. It held that instructions issued by the Board (referring to Section 119 of the Act) cannot override statutory provisions or make them obsolete. Legislative enactments with financial implications must be followed mandatorily. The Court reiterated its view, consistent with the coordinate bench's decisions in Jasjit Singh and Jatinder Singh Bhangu, that circulars or instructions cannot be issued to usurp legal provisions or cause hardship and confusion to assessees. The Court found that notices issued by the Jurisdictional Assessing Officer under Section 148 of the Act and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B were contrary to the provisions of the Act. Consequently, the notices dated 08.03.2024, 20.03.2024, 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 as laid down under the Act. 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 proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, are liable to be set aside for want of jurisdiction? (Question of law and mixed fact and law, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that the notices and proceedings were invalid because they were not conducted through the faceless assessment mechanism mandated by Section 144B of the Act, leading to a lack of jurisdiction. The petitioner relied on the principles laid down in the judgments of Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. Revenue's Contention: The revenue, through its Senior Standing Counsel, accepted notice and did not present any arguments against the petitioner's claim, implicitly agreeing with the precedent set by the coordinate benches.