DEVI DAYAL vs. INCOME TAX OFFICER AND OTHERS

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CWP/22957/2024HC Punjab & HaryanaPHHC01120634202410 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 render them obsolete. Legislative enactments with financial implications must be followed strictly. Authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Instructions and circulars can only supplement statutory provisions for implementation. Consequently, notices issued by the Jurisdictional Assessing Officer under Section 148 and proceedings initiated thereafter, without conducting faceless assessment as envisaged under Section 144B, were found to be contrary to the Act. The Court set aside the notices dated 09.04.2024 under Section 148 and the order dated 09.04.2024 under Section 148A(d), along with consequential proceedings, for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act if advised. The ratio is that faceless assessment procedures mandated by statute cannot be bypassed by issuing notices without adhering to them, and such procedural lapses render the proceedings void.

What were the facts?

The petitioner, Devi Dayal, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Jurisdictional Assessing Officer under Section 148 and an order under Section 148A(d) of the Income Tax Act, 1961, both dated 09.04.2024, along with consequential proceedings. The revenue, represented by the Income Tax Officer and others, accepted notice. Both parties agreed that the issue was concluded by prior judgments of the High Court in Jasjit Singh vs. Union of India and others (CWP No.21509 of 2023, decided on 29.07.2024) and Jatinder Singh Bhangu vs. Union of India and others (CWP No.15745 of 2024, decided on 19.07.2024). The High Court was asked to decide if the assessment proceedings were validly initiated.

What were the issues?

1. Whether notices issued under Section 148 and proceedings initiated thereafter, without conducting faceless assessment as envisaged under Section 144B of the Income Tax Act, 1961, are contrary to the provisions of the Act and liable to be set aside? (Question of law and fact, concerning Sections 148 and 144B). Assessee's Contention: The assessee, through counsel, argued that the issue was already decided by this Court in previous writ petitions, specifically Jasjit Singh and Jatinder Singh Bhangu. They relied on the principle that circulars and instructions cannot override statutory provisions and that faceless assessment procedures must be followed. Revenue's Contention: The revenue, through Sr. Standing Counsel, accepted notice and did not present a contrary argument, conceding that the matter was concluded by the aforementioned judgments. They did not rely on any specific authorities or circulars to support a different view.

Which sections of the Income-tax Act were involved?

Section 148,Section 144B,Section 148A(d),Section 119,Section 120

AI-generated summary — verify with the full judgment below

CWP-22957-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 141 CWP-22957-2024

Decided on : 10.09.2024 Devi Dayal . . . Petitioner(s) Versus Income Tax Officer and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. B.M. Monga, Advocate and Mr. Rohit Kaura, Advocate for the petitioner(s). Ms. Gauri Neo Rampal, Sr. Standing Counsel for the respondents – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Ms. Gauri Neo Rampal, Sr. Standing Counsel, accepts notice for the respondents – revenue. 3. Both the counsel are ad idem that the issue involved in the present petition stands finally examined and concluded by this Court in CWP No.21509 of 2023 titled as Jasjit Singh vs. Union of India and others, decided on 29.07.2024, and by the Coordinate Bench in CWP No.15745 of 2024 titled as Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. This Court in Jasjit Singh (supra) held as under: “16. We are in agreement with the view taken by the 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 JAWALA RAM 2024.09.11 13:34 I attest to the accuracy and authenticity of this document

CWP-22957-2024 - 2 - 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 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.” JAWALA RAM 2024.09.11 13:34 I attest to the accuracy and authenticity of this document

CWP-22957-2024 - 3 - 4. 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 u/s 148 dated 09.04.2024 and order issued u/s 148A(d) dated 09.04.2024, as well as consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE September 10, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.09.11 13:34 I attest to the accuracy and authenticity of this document

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