MUKUL HASTEER vs. CENTRAL BOARD OF DIRECT TAXES NORTH BLOCK NEW DELHI AND ORS

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CWP/23415/2024HC Punjab & HaryanaPHHC01122956202413 September 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The Tribunal held that notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential proceedings initiated thereafter, particularly those without conducting the faceless assessment as envisaged under Section 144B of the Act, were found to be contrary to the provisions of the Act. Relying on the law laid down by a Coordinate Bench in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra), the Court reiterated that circulars or instructions by the Board cannot override statutory provisions. The Court found that the notices and subsequent proceedings, specifically mentioning notices dated 28.02.2023, 16.03.2023, 20.03.2024, 30.03.2023, and an order dated 30.03.2023, were issued for want of jurisdiction. Consequently, these notices and proceedings were set aside. The revenue was granted liberty to follow the procedure as laid down under the Act and proceed accordingly, if advised. The writ petition was allowed, and the interim orders stood merged with the present order.

What were the facts?

The petitioners, represented by advocates, filed a writ petition challenging notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The respondent, the Income Tax Department, was represented by a Senior Standing Counsel. The Court noted that the issue was similar to previously decided cases, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) and CWP No. 15745 of 2023 (Jatinder Singh Bhangu vs. Union of India and others), both decided on July 29, 2024. The Court was informed that the counsel for both parties were in agreement regarding the outcome based on these prior judgments.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under the faceless assessment scheme, as envisaged by Section 144B (7 & 8), are valid when they are found to be contrary to the provisions of the Act and its circulars, potentially rendering them otiose or obsolete? (Mixed question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued, by relying on the precedent set in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra), that instructions by the Board (circulars) cannot override statutory provisions. The Court's previous rulings indicated that such instructions should not be issued to make statutory provisions otiose or obsolete, and that legislative enactments with financial implications must be followed mandatorily. The powers under Sections 119 and 120, as well as Section 144B (7 & 8), cannot be exercised to usurp legal provisions for the convenience of assessees, causing hardship and confusion. Instructions can only supplement statutory provisions and their implementation. Revenue's Contention: The revenue did not present any arguments against the assessee's position, as their counsel was in agreement with the outcome based on the cited precedents.

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

124 IN TH MUKUL HAS

CENTRAL B THROUGH S OTHERS

CORAM: H

Present: 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 HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of STEER

V OARD OF DIRECT TAXES, N SECRETARY, MINISTRY OF F

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ (Through Video Conferencin Mr. Divya Suri, Advocate with Mr. Sachin Bhardwaj, Advocate Mr. Yogesh Kumar Mittal, Advo Ms. Gauri Neo Rampal, Senior S for the respondent/Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Ms. Gauri Neo Rampal, Senior S 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 AB AND HARYANA AT RH 23415-2024 (O&M) f Decision:13.09.2024

..…...Petitioners (s) V/s. NORTH BLOCK-NEW DELHI, FINANCE, NEW DELHI AND

......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH ng/Hybrid Mode) and ocate for the petitioner. Standing Counsel Department. Standing 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

D e e n , f , Suresh Kumar 2024.09.19 10:47 I attest to the accuracy and integrity of this document

CWP-23415-202

o i 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 024 (O&M) Page 2 of 3

obsolete. Legislative enactmen implications are required to be 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.” nts having financial e followed strictly and 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 Suresh Kumar 2024.09.19 10:47 I attest to the accuracy and integrity of this document

CWP-23415-202

4.

K aforesaid term mutandis to th Assessing O consequential 5. A

September 13 Ess Kay

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

Keeping in view above, we a ms. The observations and order p he present case. Accordingly, no Officer u/s 148 dated 05.04 l proceedings are set aside. All pending applications also stan [SANJEEV 3, 2024 [SAN

king / reasoned :

Y rtable

Y allow this Writ Petition in the passed above shall apply mutatis otice issued by the Jurisdictional 4.2023 (Annexure P-6), and nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No e s l d Suresh Kumar 2024.09.19 10:47 I attest to the accuracy and integrity of this document

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