GURPREET SINGH DHILLON (SINCE DECEASED) THROUGH HIS LEGAL HEIR vs. INCOME TAX OFFICER AND OTHERS

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CWP/22576/2024HC Punjab & HaryanaPHHC01118677202406 September 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 make them obsolete. The Court agreed with the view taken by a Coordinate Bench that legislative enactments require strict adherence and mandatory compliance. The Court found that authorities cannot use powers under Sections 119, 120, and 144B(7) & (8) to usurp legal provisions for their convenience, causing hardship and confusion to taxpayers. Instructions and circulars are meant to supplement, not supplant, statutory provisions. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessments under Section 144B were found to be contrary to the Act. The notices dated 27.03.2024 and all consequential proceedings were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The Court allowed the writ petition.

What were the facts?

The petitioner, Gurpreet Singh Dhillon, filed a writ petition challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue, represented by the Income Tax Officer and others, accepted notice. The Court noted that the substantial issue was already decided in similar cases: Jasjit Singh vs. Union of India and others (decided on 29.07.2024) and Jatinder Singh Bhangu vs. Union of India and others (decided on 19.07.2024). The present petition was filed on 06.09.2024. The notices under challenge were dated 27.03.2024.

What were the issues?

1. Whether circulars or instructions issued by the Board can override statutory provisions or render them obsolete, contrary to the mandate of Sections 119 and 120 of the Income Tax Act, 1961, and Sections 144B(7) & (8). Assessee's contention: The assessee relied on the decisions in Jasjit Singh and Jatinder Singh Bhangu, arguing that the High Court had already held that such circulars cannot override statutory provisions. The assessee contended that the notices and proceedings initiated without conducting faceless assessment as envisaged under Section 144B were contrary to the Act. Revenue's contention: The revenue suggested that there might be grounds to distinguish the present case from the previously decided ones. However, the judgment does not explicitly record the revenue's specific arguments beyond accepting notice and the general stance that a different view might be taken.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

137

I Gurpreet Sing

Income Tax O

CORAM: H

Present M

SANJEEV P 1.

N 2.

M behalf of the r 3.

L issue involved by this Court India and oth CWP No.1574 and others, de under: “ B c m f IN THE HIGH COURT OF PUN AT CHANDIGA C D gh Dhillon

Vs. Officer and others

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Nikhil Goyal, Advocate for t ***

RAKASH SHARMA, J.(Oral) Notice of motion. Ms. Urvashi Dhugga, Sr. Stand revenue. Learned counsel for the parties d in the present petition stands f in CWP No.21509 of 2023 title hers, decided on 29.07.2024, an 745 of 2024 titled as Jatinder Sin ecided on 19.07.2024. This Cour “16. We are in agreement with th Bench and hold that such circul could not have been issued to ove make them otiose or obsolete. financial implications are requi NJAB AND HARYANA ARH CWP-22576-2024 (O&M) Date of Decision: 06.09.2024

…Petitioner

…Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH the petitioner.

) ding Counsel, accepts notice on are ad idem that the substantial finally examined and concluded ed as Jasjit Singh vs. Union of nd by the Coordinate Bench in ngh Bhangu vs. Union of India rt in Jasjit Singh (supra) held as he view taken by the Coordinate lar or instructions by the Board erride statutory provisions or to Legislative enactments having ired to be followed strictly and n l d f n a s e d

g d RAJESH KUMAR 2024.09.09 13:02 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP- 22576-2024 (O&M)

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 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.”

RAJESH KUMAR 2024.09.09 13:02 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP- 22576-2024 (O&M)

Keeping in view above, we allow this Writ Petition in the aforesaid terms. The observations and order passed above shall apply mutatis mutandis to the present case. Accordingly, notice issued by the Jurisdictional Assessing Officer under Section 148 dated 27.03.2024, and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 06.09.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No

RAJESH KUMAR 2024.09.09 13:02 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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