NAVDEEP KUMAR HUF vs. PR COMMISSIONER OF INCOME TAX PATIALA AND ANOTHER

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CWP/25485/2024HC Punjab & HaryanaPHHC01132943202403 October 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 subsequent proceedings initiated under Section 144B of the Act, were contrary to the provisions of the Act and therefore set aside for want of jurisdiction. The Court agreed with the view taken by coordinate benches, stating that instructions or circulars by the Board cannot override statutory provisions. Legislative enactments must be followed mandatorily. The Court found that exercising powers under Sections 119 and 120, as well as Section 144B (7 & 8), should not allow authorities to usurp legal provisions for their convenience, causing hardship and confusion to assessees. Instructions and circulars are meant for supplementing statutory provisions and for their implementation. Consequently, the notices dated February 28, 2023, March 16, 2023, March 20, 2024, March 30, 2023, and the order dated March 30, 2023, were set aside. The revenue was granted liberty to follow the procedure laid down under the Act, if advised. The interim order passed by the Court was merged with the final order.

What were the facts?

The petitioner, Navdeep Kumar HUF, challenged notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The Revenue, represented by the Pr. Commissioner of Income Tax Patiala, was the respondent. The assessment year(s) are not explicitly stated but the notices were dated between February 28, 2023, and March 30, 2023, with one notice dated March 20, 2024. The core of the challenge was that these notices and the ensuing faceless assessment proceedings under Section 144B were initiated without proper jurisdiction and were contrary to the provisions of the Act. The High Court noted that similar issues had been decided by coordinate benches in other writ petitions.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated under Section 144B of the Act, are valid when they are alleged to be contrary to the provisions of the Act and issued without jurisdiction. Assessee's Contention: The assessee argued that the notices and subsequent faceless assessment proceedings were contrary to the provisions of the Income Tax Act, 1961, and initiated without jurisdiction. The assessee relied on the decisions of coordinate benches of the High Court in CWP No. 509 of 2023 (Jasjit Singh vs. Union of India) and CWP No. 157 of 2024 (Jatinder Singh Bhangu vs. Union of India). Revenue's Contention: The revenue, through its counsel, accepted notice and did not present a distinct argument against the assessee's position, implicitly agreeing that the matter could be decided based on previous judgments by coordinate benches.

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

CWP-25485-202

137

IN TH Navdeep Kum The Pr. Comm CORAM: H

H Present: M

M f SANJEEV P

1.

Notice 2. Ms. Pri of respo 3. Both th petition No.215 decided No.157 and oth held as b 24

Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

mar HUF Vs.

missioner of Income Tax Patiala **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Rishab Kapoor, Advocate fo Ms. Pridhi Sandhu, Junior Standi for respondent/Revenue **** RAKASH SHARMA, J.(Oral) of motion. idhi Sandhu, Junior Standing C ondents/Revenue. he counsel are ad idem that the n stands finally examined and co 509 of 2023 titled as Jasjit Singh d on 29.07.2024, and by the 745 of 2024 titled as Jatinder Sin hers, decided on 19.07.2024. Th under: “16. We are in agreemen by the Coordinate Bench and hol

AB AND HARYANA AT RH CWP-25485-2024 Date of Decision: 03.10.2024 . . . . Petitioner and another . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH or the petitioner. ing Counsel ) ounsel accepts notice on behalf e issue involved in the present oncluded by this Court in CWP h vs. Union of India and others, e Coordinate Bench in CWP ngh Bhangu vs. Union of India his Court in Jasjit Singh (supra) nt with the view taken ld that such circular or

4 4

r s f t P , P a ) RASHMI 2024.10.03 16:49 I attest to the accuracy and integrity of this document

CWP-25485-202

i o o i m S S a s a t a s i n s w C u i a A p d 3 f a t 24

Page 2 of 3 nstructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen mplications 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 mplementation. 17. In view of the aforesa no occasion to distinguish or ta suggested by the learned counse what has already been held by th 18. Keeping in view the Coordinate Bench (supra), notic under Section 148 of the Act, 196 nitiated thereafter without con assessment as envisaged under Act, 1961, have been found to 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-reven at liberty to follow the procedur the Act, 1961 and proceed accord

not have been issued to to make them otiose or nts having financial 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 aid discussion, there is ake a different view as el for the revenue from he Coordinate Bench. law laid down by the ces issued by the JAO 61 and the proceedings nducting the faceless r Section 144B of the o be contrary to the d accordingly notices 23, 20.03.2024 and 03.2023, are set aside nue would be, however, re as laid down under dingly, if so advised.

RASHMI 2024.10.03 16:49 I attest to the accuracy and integrity of this document

CWP-25485-202

i w 4. Keepin terms. mutand Jurisdic 27.03.2 5. All pen

October 03, 20 rashmi 1. Whethe 2. Whethe 24

Page 3 of 3 20. All the writ petition nterim order passed by the Cou with the present order.”

ng in view above, we allow this The observations and order pa dis to the present case. Ac ctional Assessing Officer 2024(P-2) as well as the consequ nding applications also stand disp

(SANJ 024 r speaking/reasoned?

Y r reportable?

ns are allowed. The urt shall stand merged s Writ Petition in the aforesaid assed above shall apply mutatis ccordingly, notice issued by under Section 148 dated uential proceedings are set aside. posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d s y d RASHMI 2024.10.03 16:49 I attest to the accuracy and integrity of this document

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