M/S OHANA OVERSEAS vs. INCOME TAX OFFICER AND OTHERS

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CWP/24942/2024HC Punjab & HaryanaPHHC01128863202426 September 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 by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential proceedings initiated thereafter, including those under faceless assessment as envisaged under Section 144B (7 & 8) of the Act, were found to be contrary to the provisions of the Act, 1961, and therefore, were set aside for want of jurisdiction. The Court agreed with the view taken by its Coordinate Bench that instructions by the Board (circulars) cannot override statutory provisions and that legislative enactments having financial implications must be followed strictly. The Court reasoned that authorities cannot usurp legal provisions for their own satisfaction or convenience, causing hardship and confusion to assessees. Circulars and instructions can only supplement statutory provisions and aid in their implementation. The revenue was granted liberty to follow the procedure as laid down under the Act, 1961, and proceed accordingly if so advised. The operative direction was to allow the writ petition and set aside the impugned notices and consequential proceedings.

What were the facts?

The petitioners, M/s Ohana Overseas through its Partner Sh. Mohit Madan, filed a writ petition before the High Court of Punjab and Haryana at Chandigarh challenging notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The assessment year is not explicitly stated but implied to be related to the notices dated 31.08.2024. The revenue, represented by the Income Tax Department, accepted notice. The High Court noted that similar issues had been decided by its Coordinate Bench in previous writ petitions. The core of the dispute revolves around the validity of notices issued under Section 148 and subsequent faceless assessment proceedings.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings initiated thereafter, are valid when they are found to be contrary to the provisions of the Act, 1961? (Mixed question of law and fact, concerning Section 148 and Section 144B). Assessee's Contention: The petitioner implicitly argues that the notices and proceedings are invalid. The judgment relies on previous decisions of the Coordinate Bench which held that instructions by the Board (circulars) cannot override statutory provisions and that legislative enactments with financial implications must be followed strictly. The court's reasoning suggests that faceless assessment proceedings initiated without adhering to statutory mandates are illegal. Revenue's Contention: The revenue, through its Senior Standing Counsel, accepted notice. The judgment does not record specific arguments made by the revenue against the petitioner's case, but rather notes that the counsel are 'ad idem' that the issue has been concluded by previous judgments.

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

118 IN TH M/S OHANA

INCOME TAX

CORAM: H

H

Present: M

M f

* SANJEEV PR

1.

N

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 HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of OVERSEAS THROUGH ITS PA

V X OFFICER, WARD-1, KARNAL

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ

(Through Video Conferencin Mr. Nikhil Goyal, Advocate for t 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 AB AND HARYANA AT RH 24942-2024 (O&M) f Decision:26.09.2024 ARTNER SH. MOHIT MADAN

..…...Petitioners (s) V/s. L, HARYANA AND OTHERS …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH ng/Hybrid Mode) the 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 ) ) e e P , f , Suresh Kumar 2024.09.27 09:20 I attest to the accuracy and integrity of this document

CWP-24942-202

m 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 024 (O&M) mandatorily. By exercising the 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

18.

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.

19.

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

20.

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 powers contained in 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 e s Suresh Kumar 2024.09.27 09:20 I attest to the accuracy and integrity of this document

CWP-24942-202

mutandis to th Assessing O consequential

5.

A

September 26 Ess Kay

Whether speak Whether Repor 024 (O&M) he present case. Accordingly, no Officer u/s 148 dated 31.08.2 l proceedings are set aside. All pending applications also stan [SANJEEV 6, 2024 [SAN

king / reasoned :

Y rtable

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Y otice issued by the Jurisdictional 2024 (Annexure P-5) and all nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No l l Suresh Kumar 2024.09.27 09:20 I attest to the accuracy and integrity of this document

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