DEEPAK MANGLA vs. ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/32226/2024HC Punjab & HaryanaPHHC01166929202417 December 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court, following its previous decisions in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra), held that administrative instructions or circulars issued by the Board cannot override statutory provisions or make them obsolete. The Court reiterated that legislative enactments must be followed strictly, and powers contained in Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), cannot be exercised by authorities to usurp legal provisions for their convenience, causing hardship and confusion to assessees. The Court found that the notices issued under Section 148 of the Act, 1961, and the subsequent proceedings, including faceless assessments under Section 144B, were contrary to the provisions of the Act, 1961. Consequently, the notices dated 31.08.2024, 28.02.2023, 16.03.2023, 20.03.2024, 30.03.2023, and the order dated 30.03.2023, were set aside for want of jurisdiction. The respondents-revenue were granted liberty to follow the procedure laid down under the Act, 1961, and proceed accordingly if so advised. The writ petition was allowed, and interim orders were merged with the final order.

What were the facts?

The petitioners, Deepak Mangla and others, challenged notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The Revenue, represented by the Commissioner of Income Tax and others, defended these actions. The assessment years are not explicitly stated for the present writ petition, but the underlying issue pertains to assessments initiated under Section 148. The petitioners argued that the notices and proceedings were without jurisdiction. The High Court was considering the present writ petition in light of previous decisions in similar cases, specifically CWP No. 509 of 2023 (Jasjit Singh vs. Union of India) and CWP No. 157 of 2024 (Jatinder Singh Bhangu vs. Union of India), which were decided on July 29, 2024, and July 19, 2024, respectively. The core of the dispute revolved around the validity of faceless assessment proceedings and the overriding effect of statutory provisions versus administrative instructions.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings, including faceless assessments under Section 144B, are liable to be set aside for want of jurisdiction, considering the conflict between statutory provisions and administrative instructions. Assessee's Contention: The petitioner argued that the notices and proceedings were without jurisdiction. They relied on the principle that administrative instructions, including those from the CBDT, cannot override statutory provisions or render them otiose. The petitioner's counsel referred to the judgments in CWP No. 509 of 2023 (Jasjit Singh vs. Union of India) and CWP No. 157 of 2024 (Jatinder Singh Bhangu vs. Union of India) decided by a Coordinate Bench. Revenue's Contention: The learned counsel for the revenue did not present a distinct argument but rather suggested that the court might need to distinguish or take a different view from the previously decided cases. The revenue's stance implicitly supported the validity of the notices and proceedings initiated.

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

CWP-32226-202 118 IN TH DEEPAK MA ASSISTANT

CORAM: H

H Present: M

SANJEEV P

1.

Both th petition No.215 decided No.157 and oth held as b i o 24 (O&M) Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

ANGLA Vs.

COMMISSIONER OF INCOM **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Nikhil Goyal, Advocate for t Mr. Yogesh Putney, Sr. Standing Mr. Vaibhav Gupta, Standing Co for the respondents/Revenue. **** RAKASH SHARMA, J.(Oral) 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: “16. We are in agreemen by the Coordinate Bench and hol nstructions by the Board could n override statutory provisions or t AB AND HARYANA AT RH CWP-32226-2024 (O&M) Date of Decision: 17.12.2024 . . . . Petitioner ME TAX AND OTHERS . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH the petitioner. g Counsel with ounsel ) 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) nt with the view taken ld that such circular or not have been issued to to make them otiose or

) 4 r s t P , P a ) MOHIT GOYAL 2024.12.18 11:44 I attest to the accuracy and integrity of this document

CWP-32226-202 o i m S S a s a t a s i n s w C u i a A p d 3 f a t 24 (O&M) Page 2 of 3 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. 19. The respondents-reven at liberty to follow the procedur the Act, 1961 and proceed accord 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 nue would be, however, re as laid down under dingly, if so advised.

MOHIT GOYAL 2024.12.18 11:44 I attest to the accuracy and integrity of this document

CWP-32226-202 i w 2. Keepin terms. mutand issued Jurisdic proceed 3. All pen

December 17, Mohit goyal 1. Whethe 2. Whethe 24 (O&M) Page 3 of 3 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 under Section 148 of the ctional Assessing Officer as dings are set aside. nding applications also stand disp

(SANJ 2024 r speaking/reasoned?

Y r reportable?

Y 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 Income Tax Act, 1961 by s well as the consequential posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d s 4 y l MOHIT GOYAL 2024.12.18 11:44 I attest to the accuracy and integrity of this document

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