JAMNA AUTO INDUSTRIES LIMITED vs. INCOME TAX OFFICER, WARD 1, YAMUNA NAGAR AND ANOTHER

Facts

The petitioner, Jamna Auto Industries Limited, challenged a notice dated 31.08.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent consequential proceedings. The petitioner argued that the assessment proceedings were initiated without conducting a faceless assessment as envisaged by Section 144B of the Act. The Revenue was represented by counsel. The High Court had previously dealt with similar issues in two other writ petitions: Jasjit Singh vs. Union of India and others, decided on 29.07.2024, and Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. The present petition was filed in the High Court of Punjab and Haryana at Chandigarh.

Held

The High Court held that instructions issued by the Board under Section 119 and 120 of the Income Tax Act, 1961, cannot override statutory provisions or make them otiose. Legislative enactments with financial implications must be followed strictly. The Court reiterated its agreement with a Coordinate Bench's view that circulars or instructions cannot be issued to override statutory provisions or make them obsolete. The Court found that notices issued 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. Therefore, the notices dated 31.08.2024, 23.03.2023, 16.03.2023, 30.03.2023, 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 and proceed accordingly if 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 without conducting a faceless assessment as mandated by Section 144B of the Act, are valid and have jurisdiction. Assessee's Contention: The assessee contended that the assessment proceedings were initiated without adhering to the mandatory provisions of faceless assessment under Section 144B of the Income Tax Act, 1961, rendering the notices and subsequent actions void for want of jurisdiction. The assessee relied on the principles laid down in previous judgments by the same High Court. Revenue's Contention: The Revenue, through its counsel, accepted notice. The judgment does not explicitly record any specific arguments or contentions made by the revenue beyond accepting notice and appearing through counsel.