JINDAL STEEL AND POWER LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), GURGAON

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CWP/24225/2024HC Punjab & HaryanaPHHC01127705202420 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 circulars or instructions issued by the Board cannot override statutory provisions or render them otiose. Legislative enactments with financial implications must be strictly followed. The Court found that by exercising powers under Sections 119 and 120, as well as Section 144B(7 & 8), authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Instructions and circulars can only supplement statutory provisions and their implementation. The Court agreed with the Coordinate Bench's view and found no reason to distinguish the present case. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessment under Section 144B were found to be contrary to the Act. The notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, along with the order dated 30.03.2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act if advised. The writ petitions were allowed, and interim orders merged with the final order. Specifically for the present case, the notice dated 31.08.2024 under Section 148 and consequential proceedings were set aside.

What were the facts?

The petitioner, Jindal Steel and Power Limited, filed a writ petition challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The petitioner argued that these actions were taken without adhering to the faceless assessment procedure mandated by Section 144B of the Act. The revenue accepted notice. The High Court was considering the substantial issue involved in the present petition, which was stated to be finally examined and concluded in previous similar writ petitions decided by the same court.

What were the issues?

1. 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, 1961? Assessee's Contention: The assessee contended that the notices and proceedings were invalid as they bypassed the mandatory faceless assessment procedure outlined in Section 144B. The assessee relied on previous judgments of the Coordinate Bench in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. Revenue's Contention: The revenue did not record any specific contention against the assessee's arguments. The counsel for the revenue accepted notice.

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

115

I Jindal Steel an

Assistant Com

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Present M

SANJEEV P 1.

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M of the revenue 3.

L issue involved by this Court India and oth CWP No.1574 and others, de under: “ B c IN THE HIGH COURT OF PUN AT CHANDIGA C D nd Power Limited

Vs. mmissioner of Income Tax

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Vishal Gupta, Advocate for t ***

RAKASH SHARMA, J.(Oral) Notice of motion. Mr. Varun Issar, Sr. Standing Co e. 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 NJAB AND HARYANA ARH CWP-24225-2024 (O&M) Date of Decision: 20.09.2024

…Petitioner

…Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH the petitioner.

) ounsel, accepts notice on behalf 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 f l d f n a s e d

RAJESH KUMAR 2024.09.23 13:03 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP- 24225-2024 (O&M)

make them otiose or obsolete. Legislative enactments having financial implications are required to be followed strictly and 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. RAJESH KUMAR 2024.09.23 13:03 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP- 24225-2024 (O&M)

20.

All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.”

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 148 of the Income Tax Act, dated 31.08.2024 and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE

20.09.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No

RAJESH KUMAR 2024.09.23 13:03 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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