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

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CWP/27817/2024HC Punjab & HaryanaPHHC01140225202416 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition. It held that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be strictly followed. The court found that by exercising powers under Sections 119 and 120 of the Act, 1961, as well as Section 144B(7 & 8), authorities cannot usurp legal provisions for their convenience, causing hardship to assessees and confusion. Instructions and circulars can only supplement statutory provisions and aid in their implementation. Consequently, notices issued by the JAO under Section 148 and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B were found to be contrary to the Act, 1961. The specific notice dated 27.03.2024 and consequential proceedings were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, 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 at Chandigarh. The petition challenged a notice dated 27.03.2024 issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and the consequential proceedings. The respondents are the Principal Commissioner of Income Tax and another authority. Both parties agreed that the issue was concluded by previous judgments of the High Court. Specifically, the court referred to its decision in CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others, decided on 29.07.2024) and a Coordinate Bench's decision in CWP No. 15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024). The court was asked to decide the validity of the notice and proceedings in light of these precedents.

What were the issues?

1. Whether notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act, 1961? (Mixed question of law and fact, concerning Sections 148 and 144B). Assessee's Contention: The assessee implicitly argued, by relying on the cited judgments, that the notice and proceedings were invalid because they bypassed the mandatory faceless assessment procedure. The judgments relied upon by the assessee (Jasjit Singh and Jatinder Singh Bhangu) held that circulars or instructions cannot override statutory provisions and that authorities cannot usurp legal provisions for their convenience, causing hardship. The notices and proceedings were found to be contrary to the Act and set aside for want of jurisdiction. Revenue's Contention: The revenue, through its counsel, acknowledged that the issue had been finally examined and concluded by this Court in the aforementioned 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-27817-2024 (O&M) Page 1 of 3 156 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-27817-2024 (O&M) Date of Decision: 16.10.2024 HARGURVINDER SINGH . . . . Petitioner Vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX AND ANR . . . . Respondents **** CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Present: Mr. Rishabh Kapoor, Advocate (through VC mode), for the petitioner. Mr. Saurabh Kapoor, Senior Standing Counsel, and Ms. Pridhi Sandhu, Standing Counsel, for the respondents. **** SANJEEV PRAKASH SHARMA, J.(Oral) 1. Notice of motion. 2. Mr. Saurabh Kapoor, Senior Standing Counsel, and Ms. Pridhi Sandhu, Standing Counsel, accept notice on behalf of respondents. 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: LAVISHA 2024.10.18 18:40 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

CWP-27817-2024 (O&M) Page 2 of 3 “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 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. LAVISHA 2024.10.18 18:40 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

CWP-27817-2024 (O&M) Page 3 of 3 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.” 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 Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, as well as the consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE October 16, 2024 Lavisha 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No LAVISHA 2024.10.18 18:40 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

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