VIKAS KUMAR vs. PR COMMISSIONER OF INCOME TAX, LUDHIANA AND ANOTHER

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CWP/31357/2024HC Punjab & HaryanaPHHC01161297202421 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 strictly followed. The Court found that by exercising powers under Sections 119 and 120, as well as Section 144B (7 & 8) of the Act, authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions and aid in their implementation. Consequently, notices issued by the JAO under Section 148 and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B were found to be contrary to the Act. The Court set aside the notice dated 24.03.2024 issued under Section 148 and the consequential proceedings for want of jurisdiction. The Revenue was granted liberty to follow the procedure laid down under the Act if advised. The writ petition was allowed in these terms.

What were the facts?

The petitioner, Vikas Kumar, filed a writ petition before the High Court of Punjab and Haryana at Chandigarh challenging a notice dated 24.03.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The Revenue was represented by the Principal Commissioner of Income Tax. Both parties agreed that the issue had been decided by the same Court in previous writ petitions, specifically 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 present petition was disposed of based on the principles laid down in those earlier judgments.

What were the issues?

1. Whether notices issued by the Assessing Officer 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 and liable to be set aside? (Question of law and mixed fact and law, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee, by implication through the reliance on prior judgments, argued that the proceedings initiated without faceless assessment were invalid. The Court's decision in Jasjit Singh (supra) was cited, which held that instructions and circulars cannot override statutory provisions and that faceless assessment is mandatory. The assessee would have argued that the notice and proceedings were vitiated by non-compliance with Section 144B. Revenue's Contention: The Revenue, through its counsel, agreed that the issue was concluded by previous judgments. In the cited judgment of Jasjit Singh (supra), the Revenue had suggested a distinction or a different view, which was rejected by the Court.

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

CWP-31357-2024 (O&M) 1 114 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-31357-2024 (O&M)

Date of Decision: 21.11.2024 VIKAS KUMAR ....Petitioner Vs. PRINCIPAL COMMISSIONER OF INCOME TAX AND ANR ....Respondents **** CORAM:HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Present: Mr. Rishabh Kapoor, Advocate for the petitioner. Mr. Ranvijay Singh, Sr. Standing Counsel for the respondents/Revenue. **** SANJEEV PRAKASH SHARMA, J.(Oral) 1 Notice of motion. 2 Mr. Ranvijay Singh, 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: “16. We are in agreement with the view taken KUMUD VERMA 2024.11.22 15:35 I attest to the accuracy and integrity of this document Chandigarh

CWP-31357-2024 (O&M) 2 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, however, at liberty to follow the procedure as laid KUMUD VERMA 2024.11.22 15:35 I attest to the accuracy and integrity of this document Chandigarh

CWP-31357-2024 (O&M) 3 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 24.03.2024 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 2024.11.22 15:35 I attest to the accuracy and integrity of this document Chandigarh

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