HARGURVINDER SINGH vs. PR COMMISSIONER OF INCOME TAX PATIALA AND ANOTHER

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CWP/27814/2024HC Punjab & HaryanaPHHC01140744202416 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 allowed the writ petition, setting aside the notice dated March 27, 2024, issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential proceedings. The Court reiterated its agreement with the view taken by a Coordinate Bench in Jasjit Singh vs. Union of India and others. 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 Court found that authorities, by exercising powers under Sections 119 and 120, and Section 144B (7 & 8) of the Act, cannot usurp legal provisions for their satisfaction and convenience, causing hardship. Instructions and circulars can only supplement statutory provisions and aid in their implementation. Therefore, notices issued under Section 148 and proceedings initiated without conducting faceless assessments 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 prescribed procedure if advised. The operative direction was to set aside the notice and consequential proceedings.

What were the facts?

The petitioner, Hargurvinder Singh, filed a writ petition before the High Court of Punjab and Haryana challenging a notice dated March 27, 2024, issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential proceedings. The revenue, represented by the Principal Commissioner of Income Tax and another, accepted notice. Both parties agreed that the issue was concluded by previous judgments of the High Court in CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) decided on July 29, 2024, and CWP No. 15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on July 19, 2024. The core of the dispute revolved around the validity of notices issued without conducting faceless assessments as envisaged under Section 144B of the Act.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated without conducting a 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 Section 148 and Section 144B of the Income Tax Act, 1961). Assessee's Contentions: The assessee argued, by relying on the judgments in Jasjit Singh and Jatinder Singh Bhangu, that notices issued under Section 148 and consequential proceedings are invalid if not conducted through the faceless assessment procedure mandated by Section 144B. The assessee contended that circulars or instructions from the Board cannot override statutory provisions and that authorities cannot circumvent legal provisions for their convenience, causing hardship to assessees. Revenue's Contentions: The revenue did not present any distinct arguments but agreed that the issue was concluded by the aforementioned High Court judgments. The revenue's counsel accepted notice and acknowledged the binding nature of 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-27814-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 153 CWP-27814-2024

Decided on : 16.10.2024 Hargurvinder Singh . . . Petitioner(s) Versus The Pr. Commissioner of Income Tax and another . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Rishabh Kapoor, Advocate for the petitioner(s). Ms. Pridhi Sandhu, Jr. Standing Counsel for the respondents – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Ms. Pridhi Sandhu, Jr. 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 2024.10.18 19:06 I attest to the accuracy and authenticity of this document

CWP-27814-2024 - 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 2024.10.18 19:06 I attest to the accuracy and authenticity of this document

CWP-27814-2024 - 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, notice dated 27.03.2024, issued by the Jurisdictional Assessing Officer u/s 148 of the Income Tax Act, 1961, and consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE October 16, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.10.18 19:06 I attest to the accuracy and authenticity of this document

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