GURMAIL SINGH vs. INCOME TAX OFFICER AND OTHERS

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CWP/23577/2024HC Punjab & HaryanaPHHC01122735202416 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 otiose. The Court agreed with the Coordinate Bench that such instructions, even when exercising powers under Sections 119, 120, and 144B(7 & 8) of the Income Tax Act, 1961, cannot be used to usurp legal provisions for convenience, causing hardship and confusion to assessees. Instructions and circulars are meant to supplement statutory provisions and aid in their implementation. Consequently, notices issued by the JAO under Section 148 and proceedings initiated without conducting faceless assessment as per Section 144B were found to be contrary to the Act. The Court set aside the impugned notices dated 20.02.2023, 14.03.2023, and 14.03.2023, and all consequential proceedings for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The Court explicitly stated there was no occasion to distinguish the present case from the law laid down by the Coordinate Bench.

What were the facts?

The petitioner, Gurmail Singh, filed a writ petition before the Punjab and Haryana High Court challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148A(b) dated 20.02.2023, Section 148A(d) dated 14.03.2023, and Section 148 dated 14.03.2023, along with consequential proceedings. The revenue accepted notice. The Court noted that the substantial issue involved had been decided by a Coordinate Bench in previous cases, specifically 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. 1574 of 2024, decided on 19.07.2024). The present writ petition was filed challenging the reassessment proceedings initiated by the JAO.

What were the issues?

1. Whether circulars or instructions issued by the Board could override statutory provisions or render them obsolete, thereby causing hardship to assessees and confusion to taxpayers? 2. Whether notices issued by the JAO 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, are contrary to the provisions of the Act? Assessee's Contentions: The assessee relied on the decisions of the Coordinate Bench in Jasjit Singh and Jatinder Singh Bhangu, arguing that the substantial issue had already been decided. The core of the assessee's argument, as reflected in the cited judgments, was that circulars and instructions cannot override statutory provisions and that faceless assessment procedures under Section 144B are mandatory. Revenue's Contentions: The revenue, through its learned counsel, accepted notice. The judgment indicates that the revenue suggested a need to distinguish the present case from the precedents cited by the assessee, implying an argument that the facts or circumstances warranted a different view.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

134

I Gurmail Singh

Income Tax O

CORAM: H

Present M

SANJEEV P 1.

N 2.

M conferencing) 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 h

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. Gauri Neo Rampal, Sr. Sta ), accepts notice on behalf of the 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-23577-2024 (O&M) Date of Decision: 16.09.2024

…Petitioner

…Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH the petitioner.

) anding Counsel (through video revenue. 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 o l d f n a s e d

g d RAJESH KUMAR 2024.09.17 13:34 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP- 23577-2024 (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 2024.09.17 13:34 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP- 23577-2024 (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 148A (b) dated 20.02.2023, under Section 148A (d) 14.03.2023 and under Section 148 dated 14.03.2023, and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 16.09.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No

RAJESH KUMAR 2024.09.17 13:34 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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