RADHEYSHYAM vs. INCOME TAX OFFICER AND OTHERS

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CWP/23406/2024HC Punjab & HaryanaPHHC01123402202413 September 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated without conducting the faceless assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act. The Court relied on its previous decisions in Jasjit Singh vs. Union of India and others and a coordinate bench's decision in Jatinder Singh Bhangu vs. Union of India and others. The reasoning was that circulars or instructions from the Board cannot override statutory provisions or be issued to make them otiose. The Court emphasized that legislative enactments having financial implications must be followed strictly and mandatorily. The Court observed that authorities cannot usurp legal provisions for their own satisfaction or convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions for implementation. Therefore, the notices dated 31.08.2023, 20.03.2024, 28.02.2023, 16.03.2023, and 30.03.2023, along with consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act if so advised.

What were the facts?

The petitioners, represented by Mr. B.M. Monga and Mr. Rohit Kaur, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The respondents are the Income Tax Officer and others. The core of the dispute revolves around the validity of notices and assessments conducted without adhering to the faceless assessment scheme as envisaged under Section 144B of the Act. The petitioners argued that these actions were contrary to the provisions of the Act and circulars issued by the CBDT. The revenue, represented by Mr. Saurabh Kapoor and Ms. Pridhi Sandhu, accepted notice. The High Court noted that similar issues had been decided in previous cases by coordinate benches.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated without conducting faceless assessments as per Section 144B of the Act, are valid. (Question of law and fact, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The notices and subsequent proceedings are invalid because they were not conducted through the faceless assessment procedure mandated by Section 144B of the Income Tax Act, 1961. The petitioners rely on the principle that statutory provisions must be followed strictly and that instructions by the Board cannot override statutory provisions or make them obsolete. Revenue's Contention: The judgment does not record specific arguments from the revenue regarding the validity of the notices or the faceless assessment procedure. However, the revenue's counsel accepted notice and was present.

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

119 IN TH RADHEY SHY

INCOME TA AMBALA, HA

CORAM: H

Present: M

M M f

* SANJEEV PR

1.

N 2. M on behalf of th 3. B present petiti CWP No.215 decided on 29 2024 titled a decided on 19

C i o o i HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of YAM

V AX OFFICER, WARD 2, AM ARYANA AND OTHERS HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. B.M. Monga, Advocate and Mr. Rohit Kaur, Advocate for the Mr. Saurabh Kapoor, Senior Stan Ms. Pridhi Sandhu Junior Standin for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Saurabh Kapoor, Senior St he respondent-Income Tax Depa Both the counsel are ad idem ion stands finally examined an 509 of 2023 titled as Jasjit Singh 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 AB AND HARYANA AT RH 23406-2024 (O&M) f Decision:13.09.2024 ..…...Petitioners (s) V/s. MBALA, AAYAKAR BHAWAN,

......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH

e petitioner. nding Counsel, with ng Counsel, Department tanding Counsel, accepts notice artment that the issue involved in the nd concluded by this Court in h vs. 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

e e n , f , Suresh Kumar 2024.09.16 13:11 I attest to the accuracy and integrity of this document

CWP-23406-202

m 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 th 024 (O&M) Page 2 of 3

mandatorily. By exercising the 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 he present case. Accordingly, no powers contained in 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 otice issued by the Jurisdictional e s l Suresh Kumar 2024.09.16 13:11 I attest to the accuracy and integrity of this document

CWP-23406-202

Assessing O consequential 5. A

September 13 Ess Kay

Whether speak Whether Repor 024 (O&M) Page 3 of 3

Officer u/s 148 dated 31.08 l proceedings are set aside. All pending applications also stan [SANJEEV 3, 2024 [SAN

king / reasoned :

Y rtable

Y 8.2024 (Annexure P-1), and nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No d Suresh Kumar 2024.09.16 13:11 I attest to the accuracy and integrity of this document

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