PUNEET SINGH vs. DEPUTY COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/26056/2024HC Punjab & HaryanaPHHC01132689202404 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE ALOK JAIN3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B, were invalid for want of jurisdiction. The Court agreed with the view taken by a Coordinate Bench, which held that circulars or instructions issued by the Board cannot override statutory provisions or be issued to make them otiose or obsolete. Legislative enactments having financial implications must be followed strictly and mandatorily. The Court found that by exercising powers contained in Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), the assessment authorities could not usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions for implementation. Consequently, the notices dated 22.03.2024, 16.03.2023, 23.03.2023, 20.03.2024, and 30.03.2023, were set aside. The revenue was granted liberty to follow the procedure laid down under the Act, if so advised. The present writ petition was allowed, and the interim order merged with the final order.

What were the facts?

The petitioners filed a writ petition before the High Court of Punjab and Haryana challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B. The core of the dispute revolved around the validity of these notices and proceedings, particularly concerning the faceless assessment scheme. The petitioners argued that the assessment proceedings were initiated without adhering to the prescribed procedures and that the notices were consequently invalid. The revenue, represented by the Income Tax Department, accepted notice. The Court noted that similar issues had been decided by a Coordinate Bench in previous cases, specifically Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B, are valid when faceless assessment procedures, as envisaged by the Act, are not followed. Assessee's Contention: The assessee argued that the notices and subsequent proceedings were invalid because they were not conducted in accordance with the faceless assessment scheme mandated by the Income Tax Act, 1961. They relied on the principle that statutory provisions must be followed mandatorily. Revenue's Contention: The revenue, through its Senior Standing Counsel, accepted notice. No specific arguments were recorded for the revenue in the provided text, other than their acceptance of notice and the implicit defense of the notices and proceedings.

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

161 IN TH PUNEET SIN

DEPUTY CO HARYANA AN

CORAM: H

Present: M M

M f

* SANJEEV PR

1.

N 2. M on behalf of th 3. L involved in th this Court in India and oth CWP No.1574 and others, de under:

C i o HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of NGH

V OMMISSIONER OF INCOME ND OTHERS

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

(Through Video Conferencin Mr. B.M. Monga, Advocate and Mr. Rohit Kaura, Advocate for th Ms. Gauri Neo Rampal, Senior S for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Ms. Gauri Neo Rampal, Senior S he respondent-Income Tax Depa Learned counsel for all the par he present petition stands final CWP No.21509 of 2023 titled 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 Coordinate Bench and hold t instructions by the Board could n override statutory provisions or t AB AND HARYANA AT RH 26056-2024 (O&M) f Decision:04.10.2024

..…...Petitioners (s) V/s. ME TAX, CIRCLE, KARNAL, …......Respondent(s) NJEEV PRAKASH SHARMA OK JAIN ng/Hybrid Mode)

he petitioner. Standing Counsel Department Standing Counsel, accepts notice artment. rties are ad idem that the issue lly examined and concluded by d 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 the view taken by the that such circular or not have been issued to to make them otiose or

) e e y f n a s Suresh Kumar 2024.10.14 10:46 I attest to the accuracy and integrity of this document

CWP-26056-202

o 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 024 (O&M) Page 2 of 3

obsolete. Legislative enactmen 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.” nts having financial 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 Suresh Kumar 2024.10.14 10:46 I attest to the accuracy and integrity of this document

CWP-26056-202

4.

K aforesaid term mutandis to th Assessing O consequential 5. A

October 4, 20 Ess Kay

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

Keeping in view above, we a ms. The observations and order p he present case. Accordingly, no Officer u/s 148 dated 22.03.2 l proceedings are set aside. All pending applications also stan [SANJEEV 024

king / reasoned :

Y rtable

Y allow this Writ Petition in the passed above shall apply mutatis otice issued by the Jurisdictional 2024 (Annexure P-1) and all nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

[ALOK JAIN] JUDGE Yes / No Yes / No e s l l Suresh Kumar 2024.10.14 10:46 I attest to the accuracy and integrity of this document

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