MK PROTIENS LIMITED vs. INCOME TAX OFFICER, WARD 1, AMBALA

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CWP/13330/2024HC Punjab & HaryanaPHHC01073632202413 August 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH2 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 subsequent proceedings, including those initiated without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, were contrary to the provisions of the Act, 1961. The Court relied on its previous decision in Jasjit Singh vs. Union of India and others, which established that circulars or instructions from the Board cannot override statutory provisions, and authorities cannot act beyond their legal powers to the detriment of assessees. Consequently, the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, along with the order dated 30.03.2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, if so advised. The writ petition was allowed, and all pending applications were disposed of.

What were the facts?

The petitioner, M.K. Proteins Ltd., filed a writ petition before the High Court of Punjab and Haryana challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue, represented by the Income Tax Department, was the respondent. The assessment years are not explicitly stated, but the notices challenged are dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, with an order dated 30.03.2023. The core of the challenge relates to the procedure followed, particularly concerning faceless assessment under Section 144B of the Act. The High Court noted that the issue had been finally adjudicated in a previous writ petition, CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others), decided on 29.07.2024.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings, including those initiated without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, are contrary to the provisions of the Act, 1961. Assessee's Contention: The assessee argued that the notices and consequential proceedings were invalid. They relied on the High Court's previous decision in Jasjit Singh vs. Union of India and others, which held that circulars cannot override statutory provisions and that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion. The assessee contended that the procedure followed was contrary to the Act. Revenue's Contention: The revenue did not present any arguments against the assessee's position. The judgment states that the counsel for the petitioner and respondents were 'ad idem' (in agreement) that the issue stands finally adjudicated in view of the previous judgment.

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

CWP-13330 of 2 246-30

IN TH

M.K. Proteins Income Tax O CORAM: H

H Present: M M

f SANJEEV P

1.

Both th petition this Co of India under: C in o o fo c S u c le a 2024(O&M) Page 1 of 2 HE HIGH COURT OF PUNJA CHANDIGAR s Ltd. Vs.

Officer, Ambala and others **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Abhinav Narang, Advocate a Ms. Parnika Singla, Advocate for Ms. Pridhi Sandhu, Jr. Standing C for the respondents/Income Tax D **** RAKASH SHARMA, J.(Oral) he counsel are ad idem that the n stands finally adjudicated in v ourt in CWP No.21509 of 2023 a and others, decided on 29.07.2 “16. We are in agreement w Coordinate Bench and hold th nstructions by the Board could n override statutory provisions or t obsolete. Legislative enactments followed strictly and mandatorily. B contained Sections 119 and 120 of Section 144B (7 & 8), the authoriti usurp the legal provisions to thei convenience causing hardship to eaves confusion in the minds of th and supplementing the statutory pro AB AND HARYANA AT RH CWP-13330-2024(O&M) Date of Decision: 13.08.2024 . . . . Petitioner . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH and r the petitioner. Counsel Department. ) e issue involved in the present view of the judgment passed by titled as Jasjit Singh vs. Union 2024, wherein this Court held as with the view taken by the hat such circular or not have been issued to to make them otiose or having financial be By exercising the powers the Act, 1961 as well as ies cannot be allowed to ir own satisfaction and the assessees. It also he taxpayers instructions ovisions and

) 4 r s t y n s RASHMI 2024.08.14 15:29 I attest to the accuracy and integrity of this document

CWP-13330 of 2 o s h C u in a 1 th 1 3 l 1 o p 2. Keeping The obs the pr 28.03.2 3. All pen

August 13, 202 Rashmi 1. Whethe 2. Whethe 2024(O&M) Page 2 of 2 17. In view of the aforesaid occasion to distinguish or take suggested by the learned counsel fo has already been held by the Coord 18. Keeping in view the Coordinate Bench (supra), notic under Section 148 of the Act, 196 nitiated thereafter without con assessment as envisaged under Se 1961, have been found to be contr he Act, 1961 and accordingly no 16.03.2023, 20.03.2024 and 30.03 30.03.2023, are set aside for want o 19. The respondents-revenue iberty to follow the procedure as la 1961 and proceed accordingly, if so 20. All the writ petitions ar order passed by the Court shall present order.” g in view above, we allow this W servations and order passed abov esent case. Accordingly, noti 024(P-2) and all consequential pr nding applications also stand disp

(SANJ 24 r speaking/reasoned?

Y r reportable?

Y d discussion, there is no e a different view as or the revenue from what dinate Bench. law laid down by the ces issued by the JAO 61 and the proceedings nducting the faceless ection 144B of the Act, rary to the provisions of otices dated 28.02.2023, 3.2023 and order dated of jurisdiction. e would be, however, at aid down under the Act, o advised. re allowed. The interim stand merged with the Writ Petition in the aforesaid terms. e shall apply mutatis mutandis to ice under Section 148 dated roceedings are hereby set aside. posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

. o d RASHMI 2024.08.14 15:29 I attest to the accuracy and integrity of this document

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