HARINDER PAL SINGH vs. PR COMMISSIONER OF INCOME TAX, PATIALA AND ANOTHER

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CWP/30568/2024HC Punjab & HaryanaPHHC01156658202413 November 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court 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. Authorities cannot use powers under Sections 119 and 120, as well as Section 144B(7 & 8), to circumvent legal provisions for their convenience, causing hardship to assessees and confusion for taxpayers. Instructions and circulars are meant to supplement statutory provisions, not to supersede them. Therefore, the court found no reason to deviate from the view taken by a Coordinate Bench in similar cases. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessments under Section 144B were found to be contrary to the Act and were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The writ petition was allowed, and the interim order merged with the final order.

What were the facts?

The petitioner, Harinder Pal Singh, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue was represented by the Principal Commissioner of Income Tax and another. The petitioner argued that the notices and proceedings were initiated without conducting a faceless assessment as envisaged under Section 144B of the Act. The court noted that the issue was similar to previously decided cases, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) and CWP No. 1574 of 2024 (Jatinder Singh Bhangu vs. Union of India and others). The amount in dispute was not explicitly stated.

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 a faceless assessment as envisaged under Section 144B of the Act, are valid and in accordance with the law? (Question of law and mixed fact and law, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's contentions: The petitioner argued that the notices and proceedings were contrary to the provisions of the Act because a faceless assessment, as mandated by Section 144B, was not conducted. Revenue's contentions: The revenue, through its counsel, suggested that there might be grounds to distinguish the present case from previous judgments. However, the judgment does not record specific arguments made by the revenue beyond this general suggestion.

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

115

Harinder Pal S

Principal Com CORAM: H

Present: M

SANJEEV P 1.

N 2.

M behalf of the r 3.

L issue involved by this Court India and oth CWP No.1574 and others, de under: “ B c IN THE HIGH COURT OF PUN AT CHANDIGA C D Singh

Vs. mmissioner of Income Tax and an

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Rishabh Kapoor, Advocate f

*** RAKASH SHARMA, J.(Oral) Notice of motion. Ms. Pridhi Sandhu, Sr. Standin revenue. Learned counsel for the parties d in the present petition stands f in CWP No.21509 of 2023 title 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 th Bench and hold that such circul could not have been issued to ove NJAB AND HARYANA ARH CWP-30568-2024 (O&M) Date of Decision: 13.11.2024

…Petitioner nother …Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH for the petitioner. ) ng Counsel, accepts notice on are ad idem that the substantial finally examined and concluded ed 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 he view taken by the Coordinate lar or instructions by the Board erride statutory provisions or to

n l d f n a s e d

RAJESH KUMAR 2024.11.14 10:21 I attest the accuracy and authenticity of this order/judgment.

[2] CWP-30568-2024 (O&M)`

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. 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. RAJESH KUMAR 2024.11.14 10:21 I attest the accuracy and authenticity of this order/judgment.

[3] CWP-30568-2024 (O&M)`

20.

All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.”

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 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, dated 26.03.2024 and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 13.11.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No RAJESH KUMAR 2024.11.14 10:21 I attest the accuracy and authenticity of this order/judgment.

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