RUCHI ARORA vs. INCOME TAX OFFICER

Facts

The petitioner, Ruchi Arora, filed a writ petition before the High Court of Punjab and Haryana challenging a notice dated 22.03.2024 issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961. The respondent is the Income Tax Officer, Ward 7(1), Ludhiana. The Court noted that the petition was being considered in light of previous decisions by a Coordinate Bench in similar matters. The procedural history indicates that the petition was filed, notice was issued, and the matter was heard by the High Court.

Held

The High Court held that instructions and circulars issued by the Board can only supplement statutory provisions and aid in their implementation; they cannot be used to make statutory provisions otiose or override them. The Court agreed with the view taken by a Coordinate Bench that such circulars or instructions cannot override statutory provisions. The Court found that notices issued by the JAO under Section 148 of the Act, 1961, and proceedings initiated under the faceless assessment scheme, were contrary to the provisions of the Act, 1961, and were issued without conducting the inquiry envisaged under Section 144B. Consequently, the notices dated 28.02.2023, 20.03.2024, and 30.03.2023 were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, if so advised. The operative direction was to allow the writ petition and set aside the impugned notices and proceedings.

Key Issues

1. Whether notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under the faceless assessment scheme, are valid when they are contrary to statutory provisions and issued without conducting the inquiry envisaged under Section 144B of the Act, 1961. (Question of law and mixed fact and law, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued, through their counsel, that instructions or circulars issued by the Board cannot override statutory provisions or render them obsolete. They relied on the principle that legislative enactments must be followed strictly and that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion. Revenue's Contention: The revenue, represented by Senior Standing Counsel Mr. Ranvijay Singh, accepted notice. The judgment does not record specific arguments made by the revenue against the assessee's contentions.