LAL HUSSAIN vs. INCOME TAX OFFICER AND OTHERS

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CWP/30991/2024HC Punjab & HaryanaPHHC01158673202418 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 allowed the writ petition, setting aside the Order issued by the Jurisdictional Assessing Officer under Section 148A(d) of the Income Tax Act, 1961, dated March 12, 2024, and the notice issued under Section 148 of the Act, dated March 12, 2024, along with consequential proceedings. The Court reiterated its finding from Jasjit Singh (supra) that circulars or instructions by the Board cannot override statutory provisions or make them otiose. Legislative enactments with financial implications must be followed strictly. The Court held that by exercising powers under Sections 119, 120, and 144B(7 & 8) of the Act, authorities cannot usurp legal provisions to their satisfaction and convenience, causing hardship. Instructions and circulars can only supplement statutory provisions. Consequently, notices issued under Section 148 and proceedings initiated without conducting faceless assessment 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 laid down under the Act if so advised. The operative direction was to set aside the impugned order and notice.

What were the facts?

The petitioner, Lal Hussain, filed a writ petition before the Punjab and Haryana High Court challenging an order passed by the Jurisdictional Assessing Officer (JAO) under Section 148A(d) of the Income Tax Act, 1961, dated March 12, 2024, and a notice issued under Section 148 of the Act, also dated March 12, 2024, along with consequential proceedings. The revenue, represented by the Income Tax Officer, Ward-1, Kapurthala, Punjab, accepted notice. Both parties agreed that the issue was concluded by prior judgments of the same 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.

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 contrary to the provisions of the Act and liable to be set aside for want of jurisdiction. Assessee's Contention: The assessee, through their counsel, relied on the judgments in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra), arguing that the proceedings were vitiated by the non-observance of the faceless assessment procedure mandated by Section 144B of the Act. They contended that circulars or instructions by the Board cannot override statutory provisions or render them obsolete, and that authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Revenue's Contention: The revenue, through its counsel, did not present any distinct arguments but accepted that the issue was concluded by the aforementioned High Court judgments. The judgment records no specific arguments made by the revenue to distinguish the present case from the precedents.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

CWP-30991-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 153 CWP-30991-2024

Decided on : 18.11.2024 Lal Hussain . . . Petitioner(s) Versus Income Tax Officer, Ward-1, Kapurthala, Punjab and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Rajiv Sharma, Advocate for the petitioner(s). Mr. Ranvijay Singh, Sr. Standing Counsel for the respondent(s) – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Mr. Ranvijay Singh, Sr. 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 2024.11.21 14:11 I attest to the accuracy and authenticity of this document

CWP-30991-2024 - 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 2024.11.21 14:11 I attest to the accuracy and authenticity of this document

CWP-30991-2024 - 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, Order issued by the Jurisdictional Assessing Officer u/s 148A(d) of the Income Tax Act, 1961, dated 12.03.2024 and notice issued u/s 148 of the Act dated 12.03.2024, as well as consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE November 18, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.11.21 14:11 I attest to the accuracy and authenticity of this document

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