ATUL GANDHI vs. PRINCIPAL COMMISSIONER OF INCOME TAX 1

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CWP/23819/2024HC Punjab & HaryanaPHHC01125629202418 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 the consequential proceedings initiated thereafter, without conducting the assessment as envisaged under Section 144B of the Act, were found to be contrary to the provisions of the Act. The Court relied on its previous decisions in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. The reasoning was that circulars or instructions issued by the Board cannot override statutory provisions or make them obsolete. Authorities cannot usurp legal provisions to their own satisfaction and convenience, causing hardship to assessees. Instructions can only supplement statutory provisions for their implementation. Therefore, the notices dated 27.03.2024, 30.06.2024, and 18.07.2024, 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. The writ petition was allowed.

What were the facts?

The petitioners, Atul Gandh and others, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The assessment years are not explicitly stated but the notices are dated between March and June 2024. The challenge is to the validity of these notices and the faceless assessment proceedings initiated thereafter. The revenue, represented by the Income Tax Department, accepted notice. The High Court considered two prior decisions of its own benches in similar matters: Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, both decided on July 9, 2024.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential faceless assessment proceedings initiated thereafter, without conducting the assessment as envisaged under Section 144B of the Act, are valid and have jurisdiction. Assessee's Contention: The assessee implicitly argues that the notices and proceedings are invalid because they were initiated without adhering to the prescribed procedures, specifically Section 144B, and that the authorities have usurped legal provisions for their convenience, causing hardship and confusion. They rely on the High Court's prior decisions in Jasjit Singh and Jatinder Singh Bhangu. Revenue's Contention: The revenue, through its counsel, accepted notice and did not present any arguments against the assessee's position, implicitly agreeing with the High Court's prior pronouncements on similar issues.

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

117 IN TH ATUL GANDH

PRINCIPAL OTHERS

CORAM: H

Present: M M

M M f

* SANJEEV PR

1.

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

C i o o HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of HI

V COMMISSIONER OF INCOME

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ

Mr. Vaibhav Sharma, Advocate a Mr.Adarsh Dubey, Advocate for Mr. Yogesh Putney, Senior Stand Mr. Vaibhav Gupta, Advocate, for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Yogesh Putney, Senior Stan respondents/Income Tax Departm 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 AB AND HARYANA AT RH 23819-2024 (O&M) f Decision:18.09.2024

..…...Petitioners (s) V/s. E TAX-1, CHANDGIARH, AND …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH and the petitioner. ding Counsel, with Department nding Counsel, accepts notice on ment. 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 D ) n e P , f , Suresh Kumar 2024.09.19 10:38 I attest to the accuracy and integrity of this document

CWP-23819-202

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 4. K aforesaid term 024 (O&M) Page 2 of 3

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.” Keeping in view above, we a ms. The observations and order p 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 allow this Writ Petition in the passed above shall apply mutatis e s Suresh Kumar 2024.09.19 10:38 I attest to the accuracy and integrity of this document

CWP-23819-202

mutandis to Jurisdictional 18.07.2024 (A aside. 5. A

September 18 Ess Kay

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

the present case. Accordin Assessing Officer u/s 148 dat Annexures P-1 to P-3), and con All pending applications also stan [SANJEEV 8, 2024 [SAN

king / reasoned :

Y rtable

Y gly, notice(s) issued by the ted 27.03.2024, 30.06.2024 and nsequential proceedings are set nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No e d t Suresh Kumar 2024.09.19 10:38 I attest to the accuracy and integrity of this document

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