SHRI OM PRAKASH BANSAL EDUCATION, SOCIAL WELFARE TRUST vs. ASSISTANT COMMISSIONER OF INCOME TAX, CHANDIGARH

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CWP/30850/2024HC Punjab & HaryanaPHHC01158433202418 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 under Sections 119 and 120 of the Income Tax Act, 1961, cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be strictly followed. The Court found that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to taxpayers. Circulars and instructions can only supplement statutory provisions and aid in their implementation. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessments as per 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 in terms of the observations and order, with the notice dated 15.04.2024 and consequential proceedings being set aside.

What were the facts?

The petitioner, Shri Om Prakash Bansal Education and Social Welfare Trust, filed a writ petition challenging a notice issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, dated 15.04.2024, and subsequent proceedings. The petitioner argued that these actions were taken without conducting a faceless assessment as envisaged under Section 144B of the Act. The revenue contended that the circulars or instructions issued by the Board could override statutory provisions. The High Court was considering the present petition in light of previous decisions in similar matters.

What were the issues?

1. Whether circulars or instructions issued by the Board under Sections 119 and 120 of the Income Tax Act, 1961, can override statutory provisions or make them otiose, particularly concerning faceless assessments under Section 144B. Assessee's Contention: The assessee implicitly argued that faceless assessment under Section 144B is a mandatory statutory requirement and that any deviation or attempt to bypass it through circulars is invalid. Revenue's Contention: The revenue argued that circulars or instructions issued by the Board have the force of law and can be used to interpret or even override statutory provisions, causing hardship to assessees.

Which sections of the Income-tax Act were involved?

Section 119,Section 120,Section 144B,Section 148

AI-generated summary — verify with the full judgment below

123

Shri Om Prak

Assistant 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 kash Bansal Education and Socia

Vs. mmissioner of Income Tax, Chan

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Sunil K. Mukhi, Advocate fo

*** RAKASH SHARMA, J.(Oral) Notice of motion. Mr. Yogesh Putney, Sr. Standi 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-30850-2024 (O&M) Date of Decision: 18.11.2024 al Welfare Trust

…Petitioner ndigarh …Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH or the petitioner. ) ing 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 2024.12.02 13:25 I attest the accuracy and authenticity of this order/judgment.

[2] CWP-30850-2024 (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 2024.12.02 13:25 I attest the accuracy and authenticity of this order/judgment.

[3] CWP-30850-2024 (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 15.04.2024, and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 18.11.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No RAJESH KUMAR 2024.12.02 13:25 I attest the accuracy and authenticity of this order/judgment.

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