DRISHINDER SINGH SANDHAWALIA vs. PRINCIPAL COMMISSSIONER OF INCOME TAX 1 CHANDIGARH

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CWP/24805/2024HC Punjab & HaryanaPHHC01129338202425 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, following its own prior decisions in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra), allowed the writ petition. The Court held that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be strictly followed. Authorities cannot use powers under Sections 119 and 120, as well as Section 144B(7 & 8), to circumvent legal provisions for their convenience, causing hardship to assessees and confusion. Instructions and circulars are meant to supplement statutory provisions and aid their implementation. Consequently, notices issued by the Jurisdictional Assessing Officer under Section 148, and subsequent proceedings, initiated without adhering to the faceless assessment procedure under Section 144B, were found to be contrary to the Act. The notices dated 27.03.2024, 02.08.2024, and 12.08.2024, and consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised.

What were the facts?

The petitioner, Drishinder Singh Sandhawalia, filed a writ petition before the High Court of Punjab and Haryana at Chandigarh challenging certain notices and consequential proceedings initiated by the revenue. The revenue, represented by the Principal Commissioner of Income Tax-1, Chandigarh, accepted notice. Both parties agreed that the issue was covered by previous judgments of the High Court in CWP No.21509 of 2023 (Jasjit Singh vs. Union of India and others) decided on 29.07.2024, and CWP No.15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on 19.07.2024. The present petition sought to set aside notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, dated 27.03.2024, 02.08.2024, and 12.08.2024, along with consequential proceedings.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act and liable to be set aside? (Question of law and mixed fact and law, turning on Sections 144B and 148 of the Income Tax Act, 1961). Assessee's Contention: The assessee relied on the judgments in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra), arguing that the notices and proceedings were invalid as they bypassed the mandatory faceless assessment procedure under Section 144B. Revenue's Contention: The revenue, through its counsel, accepted notice and did not present any distinct arguments, agreeing that the matter was concluded by the aforementioned High Court decisions. The revenue did not suggest any grounds to distinguish the present case from the precedents.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

CWP-24805-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 120 CWP-24805-2024

Decided on : 25.09.2024 Drishinder Singh Sandhawalia . . . Petitioner(s) Versus Principal Commissioner of Income Tax-1, Chandigarh and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Viraj Gandhi, Advocate for the petitioner(s). Mr. Yogesh Putney, Sr. Standing Counsel for the respondents – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Mr. Yogesh Putney, Sr. Standing Counsel, accepts notice for the respondents – revenue. 3. Both the counsel are ad idem that the issue involved in the present petition stands finally examined and concluded by this Court in CWP No.21509 of 2023 titled as Jasjit Singh vs. Union of India and others, decided on 29.07.2024, and by the Coordinate Bench in CWP No.15745 of 2024 titled as Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. This Court in Jasjit Singh (supra) held as under: “16. We are in agreement with the view taken by the Coordinate Bench and hold that such circular or instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having JAWALA RAM 2024.09.26 18:03 I attest to the accuracy and authenticity of this document

CWP-24805-2024 - 2 - 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. 20. All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.” JAWALA RAM 2024.09.26 18:03 I attest to the accuracy and authenticity of this document

CWP-24805-2024 - 3 - 4. 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, notices issued by the Jurisdictional Assessing Officer u/s 148 dated 27.03.2024, 02.08.2024 and 12.08.2024, as well as consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE September 25, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.09.26 18:03 I attest to the accuracy and authenticity of this document

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