SOHAN LAL vs. ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/23691/2024HC Punjab & HaryanaPHHC01124749202417 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 notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings, including those conducted under Section 144B (faceless assessment), were found to be contrary to the provisions of the Act and were therefore set aside for want of jurisdiction. The Court agreed with the view taken by a Coordinate Bench that circulars or instructions issued by the Board cannot override statutory provisions or make them obsolete. Legislative enactments with financial implications must be followed mandatorily. The Court reasoned that authorities cannot use their powers under Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), to usurp legal provisions for their convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions and aid in their implementation. The revenue was granted liberty to follow the procedure laid down under the Act and proceed accordingly, if so advised. The Court allowed the writ petitions, and the interim orders stood merged with the present order.

What were the facts?

The petitioners, Sohan Lal and others, challenged notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings, including those conducted under faceless assessment as envisaged by Section 144B. The assessment years are not explicitly stated. The impugned notices were dated 24.04.2023, 20.03.2024, 28.02.2023, 16.03.2023, and 30.03.2023. The petitioners contended that these notices and proceedings were without jurisdiction. The revenue, represented by the Income Tax Department, accepted notice. The High Court considered previous judgments on similar matters.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings, including those under Section 144B, are valid when they are alleged to be contrary to the provisions of the Act and issued without jurisdiction? (Mixed question of law and fact) The assessee argued that the notices and proceedings were without jurisdiction and contrary to the Act. The revenue, through its counsel, accepted notice and did not present any arguments against the assessee's contentions, relying on the Court's previous pronouncements. 2. Whether instructions or circulars issued by the Board can override statutory provisions or render them obsolete? (Question of law) The assessee contended that instructions and circulars cannot override statutory provisions. The revenue did not present a contrary argument.

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

121 IN TH SOHAN LAL

ASSISTANT AMRITSAR A

CORAM: H

Present: M M

M f

* SANJEEV PR

1.

N 2. M on behalf of th 3. B present petitio No.21509 of decided on 29 2024 titled a decided on 19

C i o o i HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of

V COMMISSIONER OF INCOM AND OTHERS HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ

Mr. Nikhil Goyal, Advocate and Mr. Tejeshwar Singh, Advocate f Mr. Saurabh Kapoor, Senior Stan for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Saurabh Kapoor, Senior St he respondents/Income Tax Dep Both the counsel are ad idem on stands finally examined and c f 2023 titled as Jasjit Singh vs 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 23691-2024 (O&M) f Decision:17.09.2024

..…...Petitioners (s) V/s. ME TAX, CENTRAL CIRCLE …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH

for the petitioner. nding Counsel, Department tanding Counsel, accepts notice partment. that the issue involved in the concluded by this Court in CWP s. 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 e P , f , Suresh Kumar 2024.09.18 09:30 I attest to the accuracy and integrity of this document

CWP-23691-202

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 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 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 e s Suresh Kumar 2024.09.18 09:30 I attest to the accuracy and integrity of this document

CWP-23691-202

mutandis to th Assessing O consequential 5. A

September 17 Ess Kay

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

he present case. Accordingly, no Officer u/s 148 dated 24.04 l proceedings are set aside. All pending applications also stan [SANJEEV 7, 2024 [SAN

king / reasoned :

Y rtable

Y otice issued by the Jurisdictional 4.2023 (Annexure P-4), and nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No l d Suresh Kumar 2024.09.18 09:30 I attest to the accuracy and integrity of this document

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