PINTU JAIN vs. INCOME TAX OFFICER

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CWP/31415/2024HC Punjab & HaryanaPHHC01161917202421 November 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, setting aside the notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, and the consequential proceedings. The Court relied on its previous decision in Jasjit Singh vs. Union of India and others, which held that circulars or instructions by the Board cannot override statutory provisions. The Court found that issuing notices and initiating proceedings without conducting faceless assessment, as mandated by Section 144B of the Act, is contrary to the provisions of the Act. The ratio decidendi is that statutory provisions, especially those with financial implications, must be strictly followed, and administrative instructions cannot be used to circumvent or override them, nor can they be used to cause hardship to assessees. The Revenue was granted liberty to follow the procedure laid down under the Act if so advised. The interim order merged with the final order.

What were the facts?

The petitioner, Pintu Jain, filed a writ petition before the High Court of Punjab and Haryana challenging a notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, and the consequential proceedings by the Jurisdictional Assessing Officer. The petitioner contended that the issue involved had been decided by this Court in previous writ petitions. The Revenue accepted notice. Both parties agreed that the present petition's issue was concluded by prior judgments of the High Court.

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 valid and in accordance with law? Assessee's Contention: The petitioner relied on the High Court's decisions in CWP No.21509 of 2023 (Jasjit Singh vs. Union of India and others) and CWP No.15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others). These judgments held that circulars or instructions issued by the Board cannot override statutory provisions and that legislative enactments with financial implications must be strictly followed. The authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Instructions and circulars can only supplement statutory provisions. Revenue's Contention: The revenue did not present any arguments against the petitioner's reliance on the aforementioned judgments. The judgment notes that the counsel for the revenue did not suggest any reason to distinguish the present case from the precedents.

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) 1 132 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-31415-2024 (O&M)

Date of Decision: 21.11.2024 PINTU JAIN

....Petitioner Vs. INCOME TAX OFFICER AND ANR ....Respondents **** CORAM:HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Present: Mr. Divya Arora, Advocate with 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 2024.11.22 15:35 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 2024.11.22 15:35 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 31.08.2024 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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