SAI VINAYAKKA EDUCATION SOCIETY vs. ASSISTANT COMMISSIONER OF INCOME TAX EXEMPTION

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CWP/26057/2024HC Punjab & HaryanaPHHC01135745202404 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE ALOK JAIN3 pages
AI SummaryAllowed

What did the High Court hold?

The Tribunal held that instructions issued by the Board cannot override statutory provisions and cannot be issued to make them otiose or obsolete. Legislative enactments must be followed strictly. The powers contained in Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), do not allow revenue authorities to usurp legal provisions for their convenience, causing hardship and confusion to assessees. The Court agreed with the Coordinate Bench that instructions can only supplement statutory provisions for implementation. Consequently, notices issued by the JAO under Section 148 dated 16.03.2024, and other consequential proceedings initiated without conducting the faceless assessment as envisaged under Section 144B, were found to be contrary to the Act and set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act, 1961, if so advised. The writ petition was allowed.

What were the facts?

The petitioners, Sai Vinayak Education Society, through Ashwani Sood, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings, including an order dated 16.03.2024 by the Jurisdictional Assessing Officer. The revenue, represented by the Income Tax Department, accepted notice. The parties agreed that the issue was covered by previous decisions of a Coordinate Bench of the same High Court in similar matters. The core of the dispute revolved around the validity of faceless assessment proceedings initiated under Section 144B of the Act, 1961, and notices issued thereafter.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings, including those under Section 144B, are valid when they are contrary to the provisions of the Act and instructions issued by the Board, particularly concerning faceless assessments? (Mixed question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued that the notices and subsequent proceedings were invalid as they were contrary to the Act and the established legal framework for faceless assessments. They relied on the Coordinate Bench's decision in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. Revenue's Contention: The revenue, through its Senior Standing Counsel, accepted notice and did not present a contrary argument, agreeing that the matter was covered by the Coordinate Bench's previous decisions.

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

162 IN TH SAI VINAYAK

ASSISTANT CIRCLE-1, C

CORAM: H

Present: M M

M f

* SANJEEV PR

1.

N 2. M behalf of the r 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 KKA EDUCATION SOCIETY TH

V COMMISSIONER OF INC CHANDIGARH AND ANOTHER

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

Mr. Deepak Agrawal, Advocate a Mr. Sanjeev K. Sharma, Advocat Mr. Varun Issar, Senior Standing for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Varun Issar, Senior Standi respondent-Income Tax Departm 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 26057-2024 (O&M) f Decision:04.10.2024 HROUGH ASHWANI SOOD

..…...Petitioners (s) V/s. COME TAX EXEMPTIONS

…......Respondent(s) NJEEV PRAKASH SHARMA OK JAIN and te for the petitioner. g Counsel, Department ing Counsel, accepts notice on ment. 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 ) S ) n e y f n a s Suresh Kumar 2024.10.14 10:46 I attest to the accuracy and integrity of this document

CWP-26057-202

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-26057-202

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 16.03.2 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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