RAKESH JAIN vs. INCOME TAX OFFICER

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CWP/30213/2024HC Punjab & HaryanaPHHC01154110202407 November 2024Author: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, and the subsequent proceedings initiated under Section 144B, conducted without a faceless assessment, were found to be contrary to the provisions of the Act. The court agreed with the view taken by coordinate benches, stating that circulars or instructions from the Board cannot override statutory provisions or be issued to make them otiose. Legislative enactments with financial implications must be followed strictly. The court observed that authorities cannot usurp legal provisions for their convenience or satisfaction, causing hardship and confusion to assessees. The court found the notices dated 31.08.2024, 23.02.2023, 16.03.2023, 20.03.2023, and 30.03.2023, along with the order dated 30.03.2023, to be without jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act and proceed accordingly if advised. The ratio decidendi is that faceless assessment provisions are mandatory, and deviations without statutory backing are invalid, rendering such proceedings void for want of jurisdiction. The court allowed the writ petition.

What were the facts?

The petitioner, Rakesh Jain, challenged notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B, which were conducted without a faceless assessment. The petitioner argued that these actions were contrary to the Act and the principles of natural justice. The respondents, the Income Tax Department, were represented by senior standing counsel. The High Court noted that similar issues had been decided by coordinate benches in previous cases, specifically citing Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, both decided on July 9, 2024. The court was presented with notices dated 31.08.2024, 23.02.2023, 16.03.2023, 20.03.2023, and 30.03.2023, along with an order dated 30.03.2023.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B, conducted without a faceless assessment, are valid and in accordance with the law? Assessee's Contentions: The assessee argued that the Income Tax Department's actions, particularly the initiation of proceedings under Section 148 and the subsequent conduct under Section 144B without a faceless assessment, were contrary to the provisions of the Income Tax Act, 1961. The assessee relied on the principles laid down by coordinate benches of the High Court in similar matters. The assessee contended that instructions by the Board could not override statutory provisions and that legislative enactments with financial implications must be followed mandatorily. Revenue's Contentions: The revenue, represented by senior standing counsel, accepted notice. The judgment does not explicitly record separate arguments from the revenue beyond accepting notice and being present. However, the court's decision implies that the revenue's position was considered in light of the precedents cited by the assessee.

Which sections of the Income-tax Act were involved?

Section 148,Section 144B,Section 119,Section 120

AI-generated summary — verify with the full judgment below

108 IN TH RAKESH JAIN

INCOME TA KARNAL AND CORAM: H

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Present: M M f

* SANJEEV PR

1.

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2.

M on behalf of th

3.

B present petitio No.21509 of decided on 29 2024 titled a decided on 19

C i o o i m HE HIGH COURT OF PUNJA CHANDIGAR

CWP-3 Date of IN

V AX OFFICER, WARD-1, KA D OTHERS … HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. Divya Arora, Advocate for th Ms. Gauri Neo Rampal, Senior S for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Ms. Gauri Neo Rampal, Senior S he respondents/Income Tax Dep Both the counsel are ad idem on stands finally examined and c f 2023 titled as Jasjit Singh vs 9.07.2024, and by the Coordina as Jatinder Singh Bhangu vs. 9.07.2024. This Court in Jasjit Si “16. We are in agreement with Coordinate Bench and hold t instructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen implications are required to be mandatorily. By exercising the AB AND HARYANA AT RH 30213-2024 (O&M) f Decision:07.11.2024

..…...Petitioner(s) V/s. ARNAL, AAYAKAR BHAWAN, …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH he petitioner. Standing Counsel Department. Standing Counsel, accepts notice partment. that the issue involved in the concluded by this Court in CWP s. Union of India and others, ate Bench in CWP No.15745 of . Union of India and others, Singh (supra) held as under: the view taken by the that such circular or not have been issued to to make them otiose or nts having financial e followed strictly and powers contained in

e e P , f , Suresh Kumar 2024.11.12 15:11 I attest to the accuracy and integrity of this document

CWP-30213 -20

S S a s a t a s i 1 o s w 1 C u p f o p d 3 f 1 l A 2 o p

4.

K aforesaid term mutandis to (Annexure P- 024 (O&M) Sections 119 and 120 of the A Section 144B (7 & 8), the a allowed to usurp the legal pro satisfaction and convenience ca assessees. It also leaves confusio taxpayers. In the opinion of th and circulars can be issued on supplementing the statutory pro implementation.

17.

In view of the aforesaid d occasion to distinguish or take suggested by the learned counse what has already been held by th

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Keeping in view the law Coordinate Bench (supra), notic under Section 148 of the proceedings initiated thereafter w faceless assessment as envisage of the Act, 1961, have been foun provisions of the Act, 1961 an dated 28.02.2023, 16.03.202 30.03.2023 and order dated 30. for want of jurisdiction.

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The respondents-revenue w liberty to follow the procedure a Act, 1961 and proceed according

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All the writ petitions are order passed by the Court shall present order.” Keeping in view above, we a ms. The observations and order p the present case. According -1) issued by the Jurisdictional A Act, 1961 as well as authorities cannot be ovisions to their own ausing hardship to the on in the minds of the his Court, instructions nly for the purpose of ovisions and for their discussion, there is no e a different view as el for the revenue from he Coordinate Bench. w laid down by the ces issued by the JAO Act, 1961 and the without conducting the ed under Section 144B d to be contrary to the nd accordingly notices 23, 20.03.2024 and 03.2023, are set aside would be, however, at as laid down under the gly, if so advised. allowed. The interim stand merged with the allow this Writ Petition in the passed above shall apply mutatis gly, notice dated 31.08.2024 Assessing Officer u/s 148 of the e s 4 e Suresh Kumar 2024.11.12 15:11 I attest to the accuracy and integrity of this document

CWP-30213 -20

Income Tax aside.

5.

A

November 7, Ess Kay

Whether speak Whether Repor 024 (O&M) Act, 1961 and all consequenti All pending applications also stan [SANJEEV , 2024

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king / reasoned :

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Y ial proceedings thereof are set nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No t Suresh Kumar 2024.11.12 15:11 I attest to the accuracy and integrity of this document

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