KAUSHALYA DEVI vs. INCOME TAX OFFICER AND ORS

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CWP/31291/2024HC Punjab & HaryanaPHHC01160971202421 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 and mandatorily followed. Authorities cannot usurp legal provisions for their convenience, causing hardship to assessees, and such instructions can only supplement statutory provisions. Consequently, notices issued by the JAO under Section 148 of the Act, 1961, and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, were found to be contrary to the Act and set aside for want of jurisdiction. The specific notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and the order dated 30.03.2023, in the Jasjit Singh case, were set aside. In the present case, the notice dated 19.03.2024 issued under Section 148 and consequential proceedings were set aside. The Revenue was granted liberty to follow the procedure laid down under the Act if advised. The operative direction was to set aside the impugned notice and consequential proceedings.

What were the facts?

The petitioner, Kaushalya Devi, filed a writ petition before the High Court of Punjab and Haryana challenging a notice dated 19.03.2024 issued under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer, and the consequential proceedings. The Revenue was represented by Ms. Gauri Neo Rampal, Sr. Standing Counsel. Both parties agreed that the issue was concluded by previous decisions of the High Court in CWP No.21509 of 2023 (Jasjit Singh vs. Union of India and others) decided on 29.07.2024, and CWP No.15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on 19.07.2024. The High Court had previously examined and concluded the issue involved in these cases.

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 and liable to be set aside for want of jurisdiction. Assessee's Contention: The assessee, by referring to the precedents set by the High Court in Jasjit Singh and Jatinder Singh Bhangu, argued that notices issued and proceedings initiated without adhering to the faceless assessment procedure under Section 144B are invalid. The circulars or instructions issued by the Board cannot override statutory provisions. Revenue's Contention: The revenue, through its counsel, acknowledged that the issue was concluded by previous judgments of the High Court and did not present a distinct argument against the petitioner's claim, implicitly agreeing with the High Court's prior findings.

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

(O&M) 1 105 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-31291-2024 (O&M)

Date of Decision: 21.11.2024 KAUSHALYA DEVI ....Petitioner Vs. INCOME TAX OFFICER AND OTHERS ....Respondents **** CORAM:HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Present: Ms. Divya Arora, Advocate and Mr. Amit Kaushik, Advocate for the petitioner. Ms. Gauri Neo Rampal, Sr. Standing Counsel (through VC) for the respondents/Revenue. **** SANJEEV PRAKASH SHARMA, J.(Oral) 1 Notice of motion. 2 Ms. Gauri Neo Rampal, Sr. Standing Counsel accepts notice on behalf of 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: KUMUD VERMA 2024.11.21 15:15 I attest to the accuracy and integrity of this document Chandigarh

(O&M) 2 “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. 19. The respondents-revenue would be, KUMUD VERMA 2024.11.21 15:15 I attest to the accuracy and integrity of this document Chandigarh

(O&M) 3 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 19.03.2024 issued under Section 148 of the Income Tax Act, 1961 by Jurisdictional Assessing Officer 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 21.11.2024 kv 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No KUMUD VERMA 2024.11.21 15:15 I attest to the accuracy and integrity of this document Chandigarh

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