GOPAL CHAND vs. ASSISTANT/ DEPUTY COMMISSIONER INCOME TAX CENTRAL CIRCLE , PATIALA

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CWP/33997/2024HC Punjab & HaryanaPHHC01177560202417 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 own previous decisions in Jasjit Singh vs. Union of India and others and a Coordinate Bench's decision in Jatinder Singh Bhangu vs. Union of India and others, 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 of the Act, 1961, as well as Section 144B (7 & 8), authorities cannot usurp legal provisions for their convenience, causing hardship. Instructions and circulars can only supplement statutory provisions. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B were found to be contrary to the Act, 1961, and set aside for want of jurisdiction. The Revenue was granted liberty to follow the prescribed procedure if advised. The writ petition was allowed in these terms.

What were the facts?

The petitioner, Gopal Chand, filed a writ petition before the High Court of Punjab and Haryana at Chandigarh. The petition challenged a notice dated 29.02.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential proceedings. The Revenue accepted notice. Both parties agreed that the issue had been decided by the High Court in previous cases, 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 to be decided based on the principles laid down in those judgments.

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 relying on the judgments in Jasjit Singh and Jatinder Singh Bhangu, would argue that the notices and proceedings are invalid as they bypass the mandatory faceless assessment procedure. The circulars or instructions by the Board cannot override statutory provisions, and any deviation causes hardship and confusion to taxpayers. Revenue's Contention: The judgment does not record any specific contentions from the Revenue for this particular case. However, in the cited judgments, the Revenue likely argued for the validity of the notices and proceedings, possibly contending that the circulars or instructions were meant to supplement, not override, the law, or that the faceless assessment provisions were not applicable in the manner argued by the assessee.

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-33997-2024 (O&M) Page 1 of 3 139 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-33997-2024 (O&M) Date of Decision: 17.12.2024 GOPAL CHAND . . . . Petitioner Vs. ASSISTANT/DEPUTY COMMISSIONER INCOME TAX CENTRAL CIRCLE PATIALA . . . . Respondents **** CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Present: Mr. Rishabh Kapoor, Advocate, for the petitioner. for the respondent(s) – Revenue. **** SANJEEV PRAKASH SHARMA, J.(Oral) 1. Notice of motion. 2. 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: LAVISHA 2024.12.19 14:05 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

CWP-33997-2024 (O&M) Page 2 of 3 “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. LAVISHA 2024.12.19 14:05 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

CWP-33997-2024 (O&M) Page 3 of 3 19. The respondents-revenue would be, 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 29.02.2024 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 December 17, 2024 Lavisha 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No LAVISHA 2024.12.19 14:05 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

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