MODERN TILES PARTNERSHIP FIRM vs. INCOME TAX OFFICER

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CWP/18950/2024HC Punjab & HaryanaPHHC01101734202407 August 2024Bench: 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 circulars or instructions issued by the Board cannot override statutory provisions or render them otiose. Legislative enactments with financial implications must be strictly followed. Authorities cannot usurp legal provisions for their convenience, causing hardship and confusion. Instructions and circulars can only supplement statutory provisions. Consequently, notices issued by the JAO under Section 148 of the Act, 1961, and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, were found to be contrary to the Act. The Court set aside the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and the order dated 30.03.2023, for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, if advised. In the present specific case, notices dated 24.03.2024 and 25.04.2024 were set aside. Other questions raised were not pressed by the petitioner and were dismissed as not pressed. The ratio is that faceless assessment procedures mandated by statute cannot be bypassed by administrative instructions or by issuing notices without adhering to the prescribed assessment mechanism.

What were the facts?

The petitioner, Modern Tiles, filed a Writ Petition before the High Court of Punjab and Haryana challenging notices and orders issued by the Income Tax Officer, Ward 3, Rohtak. The revenue, represented by Ms. Gauri Neo Rampal, Sr. Standing Counsel, accepted notice. Both parties agreed that the issue was adjudicated by a previous order of the same Court dated 29.07.2024 in Jasjit Singh Vs. Union of India and Others. This prior judgment dealt with notices issued by the Jurisdictional Assessing Officer (JAO) and found them unjustified. The present petitions were filed in relation to assessment year(s) not explicitly stated but concerning proceedings initiated under Section 148 of the Income Tax Act, 1961, without conducting faceless assessment as per Section 144B.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, are contrary to the provisions of the Act, 1961. (Question of law and mixed fact and law, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued, by reference to the lead case of Jasjit Singh Vs. Union of India and Others, that notices issued by the JAO were unjustified and contrary to statutory provisions, particularly concerning the mandate for faceless assessment. Revenue's Contention: The revenue suggested that the Court should distinguish the present case from the previously decided lead case. The Court noted that no specific arguments were recorded for the revenue beyond this suggestion.

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-18950-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 123 CWP-18950-2024

Decided on : 07.08.2024 Modern Tiles . . . Petitioner(s) Versus Income Tax Officer, Ward 3, Rohtak . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Salil Kapoor, Advocate and Mr. Kushagra Mahajan, Advocate for the petitioner(s). Ms. Gauri Neo Rampal, Sr. Standing Counsel for the respondent – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Ms. Gauri Neo Rampal, Sr. Standing Counsel, accepts notice for the respondent - revenue. 3. Learned counsel for both the sides are ad idem that the issue raised in these connected Writ Petitions stands finally adjudicated by this Court vide order dated 29.07.2024 in a bunch of Writ Petitions in which the lead case is CWP-21509-2023 titled as Jasjit Singh Vs. Union of India and Others

, whereby this Court has held the notice issued by the Jurisdictional Assessing Officer as unjustified. 4. The Court has passed the following order:- “14. xxx xxx xxx xxx 15. xxx xxx xxx xxxx 16. We are in agreement with the view taken by the JAWALA RAM 2024.08.08 18:50 I attest to the accuracy and authenticity of this document

CWP-18950-2024 - 2 - Coordinate Bench and hold that such circular or instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having financial implications are required to be followed strictly and mandatorily. By exercising the powers contained in Sections 119 and 120 of the Act, 1961 as well as Section 144B (7 & 8), the authorities cannot be allowed to usurp the legal provisions to their own satisfaction and convenience causing hardship to the assessees. It also leaves confusion in the minds of the taxpayers. In the opinion of this Court, instructions and circulars can be issued only for the purpose of supplementing the statutory provisions and for their implementation. 17. In view of the aforesaid discussion, there is no occasion to distinguish or take a different view as suggested by the learned counsel for the revenue from what has already been held by the Coordinate Bench. 18. Keeping in view the law laid down by the Coordinate Bench (supra), notices issued by the JAO under Section 148 of the Act, 1961 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, have been found to be contrary to the provisions of the Act, 1961 and accordingly notices dated 28.02.2023, 16.03.2023, 20.03.2024 and 30.03.2023 and order dated 30.03.2023, are set aside for want of jurisdiction. 19. The respondents-revenue would be, however, at liberty to follow the procedure as laid down under the Act, 1961 and JAWALA RAM 2024.08.08 18:50 I attest to the accuracy and authenticity of this document

CWP-18950-2024 - 3 - proceed accordingly, if so advised. 20. All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order. 21. xxx xxx xxxx 22. xxx xxx xxxx” 5. In view of the above, we allow this Writ Petition in the aforesaid terms. Accordingly, notice/order dated 24.03.2024 and 25.04.2024 are set aside. The other questions raised in the present Writ Petition are not pressed by the learned counsel for the petitioner. Accordingly, the same are dismissed as not pressed. 6. Pending misc. applications, if any, shall stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE August 07, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.08.08 18:50 I attest to the accuracy and authenticity of this document

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