ADITYA MALIK HUF vs. THE INCOME TAX OFFICER

Facts

The petitioner, Aaditya Malik HUF, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B. The notices were dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023. The revenue, represented by the Income Tax Department, accepted notice. The High Court noted that the issue was similar to previous cases decided by coordinate benches. The court referred to its own prior decisions in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, which dealt with the validity of faceless assessment proceedings and notices issued under Section 148.

Held

The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, and the subsequent proceedings initiated under Section 144B, without conducting faceless assessment as envisaged by the Act, were contrary to the provisions of the Act. The court relied on its previous decisions in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. These judgments established that instructions by the Board could not override statutory provisions, and legislative enactments with financial implications must be followed mandatorily. The court reiterated that circulars and instructions can only supplement statutory provisions and aid in their implementation, not usurp legal provisions or cause hardship. Consequently, the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, along with all consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act if so advised.

Key Issues

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings under Section 144B, initiated without conducting faceless assessment as envisaged by the Act, are valid? Assessee's Contention: The assessee argued that the notices and subsequent proceedings were invalid. This contention is implicitly supported by the fact that the petition was allowed based on prior judgments of the High Court. The assessee relied on the principles laid down in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. Revenue's Contention: The revenue, through its counsel, accepted notice. The judgment does not record specific arguments made by the revenue against the assessee's claim, but it acknowledges the revenue's presence and participation.