SANGEETA LEEKHA vs. INCOME TAX OFFICER AND ANOTHER

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CWP/31418/2024HC Punjab & HaryanaPHHC01161916202421 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 followed. Authorities cannot use powers under Sections 119 and 120, as well as Section 144B (7 & 8), to usurp legal provisions for their convenience, causing hardship to assessees and confusion. Instructions and circulars can only supplement statutory provisions and aid in their implementation. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings, when initiated without conducting faceless assessment as per Section 144B, were found to be contrary to the Income Tax Act, 1961. The Court set aside the impugned notice dated 31.08.2024 and consequential proceedings for want of jurisdiction. The respondents were granted liberty to follow the prescribed procedure if advised. The ratio is that faceless assessment procedures, when statutorily mandated, must be followed, and deviations without jurisdiction render subsequent actions void.

What were the facts?

The petitioner, Sangeeta Leekha, filed a writ petition challenging a notice dated 31.08.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential proceedings. The petitioner and the respondents (Income Tax Officer and another) agreed that the issue in the present petition had been decided by the High Court of Punjab and Haryana in previous writ petitions. Specifically, the parties referred to the decision 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 core of the dispute revolved around the validity of assessment proceedings initiated without following the faceless assessment procedure.

What were the issues?

1. Whether notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and subsequent proceedings are invalid if conducted without adhering to the faceless assessment procedure as envisaged under Section 144B of the Act? (Question of law and mixed fact and law, concerning Section 148 and Section 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued, by reference to prior judgments, that notices and proceedings initiated without conducting faceless assessment as mandated by Section 144B are contrary to the provisions of the Act and therefore liable to be set aside for want of jurisdiction. The assessee relied on the decisions in Jasjit Singh vs. Union of India and others and Jatinder Singh Bhangu vs. Union of India and others. Revenue's Contention: The revenue, through its counsel, accepted that the issue had been finally examined and concluded by this Court in the aforementioned prior petitions. The revenue did not present any distinct arguments against the assessee's position.

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) 1 133 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-31418-2024 (O&M)

Date of Decision: 21.11.2024 SANGEETA LEEKHA ....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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