RAJENDER MOHAN MALLA vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE I GURUGRAM AND OTHERS

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CWP/31069/2024HC Punjab & HaryanaPHHC01159766202419 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 otiose. Legislative enactments with financial implications must be followed strictly and mandatorily. The Court found that by exercising powers contained in Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), the authorities cannot usurp legal provisions to their own satisfaction and convenience, causing hardship and confusion to assessees. The Court agreed with the view taken by a Coordinate Bench in previous similar cases. Consequently, notices issued by the JAO under Section 148 of the Act, 1961, and the consequential proceedings initiated thereafter without conducting faceless assessment under Section 144B, were found to be contrary to the provisions of the Act, 1961. Accordingly, the notices dated 31.08.2024 (Annexure P-3), 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and the consequential proceedings were set aside for want of jurisdiction. The Revenue was at liberty to follow the procedure laid down under the Act, 1961, if so advised. All pending applications were also disposed of.

What were the facts?

The petitioner, Rajender Mohan Malla, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The Revenue, represented by the Assistant Commissioner of Income Tax and others, appeared. Both parties agreed that the issue had been finally examined and concluded by the same Court in similar writ petitions, specifically CWP No. 215 of 2023 (Jasjit Singh vs. Union of India and others) decided on July 29, 2024, and CWP No. 157 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on July 19, 2024. The Court noted that the notices and proceedings were challenged for want of jurisdiction.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated thereafter without conducting a faceless assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act, 1961? Assessee's Contention: The judgment does not explicitly record the assessee's specific arguments but implies reliance on the decisions in Jasjit Singh and Jatinder Singh Bhangu. The core of the challenge, as indicated by the Court's findings, is that the proceedings were initiated without adhering to the mandatory faceless assessment procedures under Section 144B, leading to a want of jurisdiction. Revenue's Contention: The Revenue, through its counsel, accepted notice and acknowledged that the issue was covered by previous judgments of the Court. The judgment does not record any specific arguments made by the Revenue to defend the notices or proceedings, other than implicitly suggesting that circulars or instructions might have been followed.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

CWP-31069-202

126

IN TH Rajender Moh Assistant Com CORAM: H

H Present: M

SANJEEV P

1.

Notice 2. Mr. Yo respond 3. Both th petition No.215 decided No.157 and oth held as 24(O&M)

Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

han Malla Vs.

mmissioner of Income Tax and o **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Gagandeep Singh Malhotra, Mr. Yogesh Putney,Sr. Standing Mr. Vaibhav Gupta, Advocate for the respondents/Revenue. **** RAKASH SHARMA, J.(Oral) of motion. ogesh Putney, Sr. Standing Coun dents/Revenue. he counsel are ad idem that the n stands finally examined and co 509 of 2023 titled as Jasjit Singh d on 29.07.2024, and by the 745 of 2024 titled as Jatinder Sin hers, decided on 19.07.2024. Th under:

AB AND HARYANA AT RH CWP-31069-2024(O&M) Date of Decision: 19.11.2024 . . . . Petitioner others . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH Advocate for the petitioner. Counsel and ) nsel accepts notice on behalf of e issue involved in the present oncluded by this Court in CWP h vs. Union of India and others, e Coordinate Bench in CWP ngh Bhangu vs. Union of India his Court in Jasjit Singh (supra)

) 4

r s f t P , P a ) RASHMI 2024.11.21 11:06 I attest to the accuracy and integrity of this document

CWP-31069-202

b i o o i m S S a s a t a s i n s w C u i a A p d 3 f 24(O&M)

Page 2 of 3 “16. We are in agreemen by the Coordinate Bench and hol nstructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen mplications are required to be mandatorily. By exercising the Sections 119 and 120 of the A Section 144B (7 & 8), the a allowed to usurp the legal pro satisfaction and convenience ca assessees. It also leaves confusio taxpayers. In the opinion of th and circulars can be issued on supplementing the statutory pro mplementation. 17. In view of the aforesa no occasion to distinguish or ta suggested by the learned counse what has already been held by th 18. Keeping in view the Coordinate Bench (supra), notic under Section 148 of the Act, 196 nitiated thereafter without con assessment as envisaged under Act, 1961, have been found to provisions of the Act, 1961 an dated 28.02.2023, 16.03.202 30.03.2023 and order dated 30. for want of jurisdiction.

nt with the view taken ld that such circular or not have been issued to to make them otiose or nts having financial followed strictly and powers contained in Act, 1961 as well as authorities cannot be ovisions to their own ausing hardship to the on in the minds of the his Court, instructions nly for the purpose of ovisions and for their aid discussion, there is ake a different view as el for the revenue from he Coordinate Bench. law laid down by the ces issued by the JAO 61 and the proceedings nducting the faceless r Section 144B of the o be contrary to the d accordingly notices 23, 20.03.2024 and 03.2023, are set aside

RASHMI 2024.11.21 11:06 I attest to the accuracy and integrity of this document

CWP-31069-202

a t i w 4. Keepin terms. mutand (Annex Section proceed 5. All pen

November 19, rashmi 1. Whethe 2. Whethe 24(O&M)

Page 3 of 3 19. The respondents-reven at liberty to follow the procedur the Act, 1961 and proceed accord 20. All the writ petition nterim order passed by the Cou with the present order.”

ng in view above, we allow this The observations and order pa dis to the present case. Accord xure P-3) issued by Jurisdict n 148 of the Income Tax Act dings thereof are set aside. nding applications also stand disp

(SANJ , 2024 r speaking/reasoned?

Y r reportable?

nue would be, however, re as laid down under dingly, if so advised. ns are allowed. The urt shall stand merged s Writ Petition in the aforesaid assed above shall apply mutatis dingly, notice dated 31.08.2024 tional Assessing Officer under t, 1961 and the consequential posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d s 4 r l RASHMI 2024.11.21 11:06 I attest to the accuracy and integrity of this document

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