N A N UDYOG THROUGH ITS PARTNER SH RAJNEESH KUMAR vs. INCOME TAX OFFICER

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CWP/25717/2024HC Punjab & HaryanaPHHC01134360202403 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The Tribunal held that circulars or instructions issued by the Board cannot override statutory provisions or render them otiose. Legislative enactments with financial implications must be followed strictly and mandatorily. The authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions for their implementation. Therefore, notices issued by the JAO under Section 148 of the Act, 1961, and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, were found to be contrary to the provisions of the Act. Consequently, notices dated 28.02.2023, 20.03.2024, 16.03.2023, and 30.03.2023, 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, 1961, and proceed accordingly if so advised. The writ petition was allowed, and interim orders were merged with the final order.

What were the facts?

The petitioner, N.A.N. Udyog, through its partner Sh. Rajneesh Kumar, filed a writ petition challenging notices issued by the Income Tax Officer, Ward-, Panipat. The respondents are the Income Tax Officer and another. The assessment year(s) are not explicitly stated but the challenge pertains to notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B. The procedural history involves the acceptance of notice by the revenue and the parties agreeing that the issue has been decided by this Court in prior writ petitions. The core of the dispute revolves around the validity of faceless assessment proceedings initiated without adhering to the prescribed legal procedures.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B of the Act, 1961, are valid when conducted without adhering to the statutory provisions and legal procedures, particularly concerning faceless assessments? (Question of law and mixed fact and law, turning on Section 148 and Section 144B of the Income Tax Act, 1961). Assessee's Contentions: The assessee relies on the decisions of a Coordinate Bench in CWP No. 215 of 2023 (Jasjit Singh vs. Union of India) and CWP No. 157 of 2024 (Jatinder Singh Bhangu vs. Union of India), which held that circulars or instructions by the Board cannot override statutory provisions and that faceless assessment proceedings initiated contrary to the Act are invalid. The assessee argues that the notices and proceedings in their case suffer from the same infirmities. Revenue's Contentions: The revenue, through its counsel, accepted notice and agreed that the issue had been finally examined and concluded by this Court in the aforementioned prior writ petitions. The revenue did not present any arguments to distinguish the present case from the precedents.

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-25717-202

139

IN TH N.A.N. Udyog Income Tax O CORAM: H

H Present: M

SANJEEV P

1.

Notice 2. Mr. Sau respond 3. Both th petition No.215 decided No.157 and oth held as 24

Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

g Through its partner Sh. Rajnee Vs.

Officer, Ward-, Panipat and anoth **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr.Amit Kaushik, Advocate for Mr. Saurabh Kapoor,Sr. Standing for the respondents/Revenue. **** RAKASH SHARMA, J.(Oral) of motion. urabh Kapoor, Sr. Standing Cou dents/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:

AB AND HARYANA AT RH CWP-25717-2024 Date of Decision: 03.10.2024 esh Kumar . . . . Petitioner her . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH the petitioner. g Counsel ) unsel accepts notice on behalf of 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)

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-25717-202

b 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 24

Page 2 of 3 “16. We are in agreemen by the Coordinate Bench and hol 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.

nt with the view taken ld that such circular or 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

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

CWP-25717-202

a t i w 4. Keepin terms. mutand Jurisdic 31.08.2 5. All pen

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

Page 3 of 3 19. The respondents-reven at liberty to follow the procedur the Act, 1961 and proceed accord 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-1) as well as the consequ nding applications also stand disp

(SANJ 024 r speaking/reasoned?

Y r reportable?

nue would be, however, re as laid down under dingly, if so advised. 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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