AARTI STEELS LTD vs. NATIONAL FACELESS APPEAL CENTRE AND OTHERS

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CWP/27763/2024HC Punjab & HaryanaPHHC01140844202416 October 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 faceless assessment proceedings initiated without conducting the assessment as envisaged under Section 144B, were found to be contrary to the provisions of the Act, 1961. The Court relied on its previous decisions in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. In these prior judgments, the Court had held that circulars or instructions from the Board could not override statutory provisions or make them obsolete. Legislative enactments with financial implications must be followed mandatorily. The Court reasoned that authorities cannot usurp legal provisions for their own satisfaction or convenience, causing hardship and confusion to assessees. Therefore, the notice dated 08.04.2022 and all consequential proceedings were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, and proceed accordingly if advised. All pending applications were also disposed of.

What were the facts?

The petitioner, Aarti Steel Ltd., filed a writ petition challenging a notice dated 08.04.2022 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and all consequential proceedings. The petitioner argued that the assessment proceedings were initiated without jurisdiction. The revenue, represented by the Income Tax Department, accepted notice. 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, which dealt with the validity of faceless assessment proceedings initiated under Section 148 without proper adherence to statutory provisions.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings initiated without conducting the assessment as envisaged under Section 144B of the Act, are valid and not contrary to the provisions of the Act, 1961? Assessee's Contention: The assessee contended that the assessment proceedings were initiated without jurisdiction, implying a procedural flaw or lack of authority in the issuance of the notice and subsequent actions. Revenue's Contention: The revenue did not explicitly record arguments against the assessee's claim. However, the court's decision was based on its prior rulings which addressed the revenue's actions in similar cases.

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

127 IN TH AARTI STEEL

NATIONAL F AND OTHER

CORAM: H

H

Present: M

M f

* SANJEEV PR

1.

N

2.

M behalf of the r

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-2 Date of LS LTD.

V FACELESS APPEAL CENTRE, RS

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

Mr. Alok Mittal, Advocate for th Mr. Ranvijay Singh, Senior Stand for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Ranvijay Singh, Senior Stan respondents/Income Tax Departm 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 27763-2024 (O&M) f Decision:16.10.2024

..…...Petitioner(s) V/s. INCOME TAX DEPARTMENT …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH he petitioner. ding Counsel Department nding Counsel, accepts notice on ment. 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 T ) n e P , f , Suresh Kumar 2024.10.18 10:28 I attest to the accuracy and integrity of this document

CWP-27763-202

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 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

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 the present case. According 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 08.04.2022 e s 2 Suresh Kumar 2024.10.18 10:28 I attest to the accuracy and integrity of this document

CWP-27763-202

(Annexure P- Income Tax A 5. A

October 16, 2 Ess Kay

Whether speak Whether Repor 024 (O&M) -3) issued by the Jurisdictional A Act, 1961 and all consequential p All pending applications also stan [SANJEEV 2024 [SAN

king / reasoned :

Y rtable

:

Y Assessing Officer u/s 148 of the proceedings are set aside. nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No e Suresh Kumar 2024.10.18 10:28 I attest to the accuracy and integrity of this document

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