M/S FASTWAY CITIZEN CABLE NETWORK PVT. LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, LUDHIANA

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CWP/5108/2024HC Punjab & HaryanaPHHC01095614202328 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The Tribunal held that notices issued under Section 148 of the Income Tax Act, 1961, and the subsequent faceless assessment proceedings initiated under Section 144B of the Act, were contrary to the provisions of the Act. The Court agreed with the view taken by a Coordinate Bench in similar cases, holding that circulars or instructions from the Board cannot override statutory provisions or render them obsolete. The Court emphasized that legislative enactments with financial implications must be followed strictly. It found that the authorities, by exercising powers under Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), had usurped legal provisions for their convenience, causing hardship and confusion to assessees. Therefore, the notices dated February 28, 2023, March 16, 2023, March 20, 2023, March 30, 2023, and the order dated March 30, 2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act if so advised. The writ petitions were allowed, and interim orders merged with the present order.

What were the facts?

The petitioner, M/s Fastway Citizen Cable Network Pvt. Ltd., challenged notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The assessment years are not explicitly stated but the notices are dated between February 28, 2023, and March 30, 2023. The core issue revolves around the validity of these notices and the subsequent faceless assessment proceedings initiated under Section 144B of the Act. The petitioner argued that these actions were taken without jurisdiction and were contrary to the provisions of the Act. The revenue was the respondent. The High Court referred to prior decisions in similar writ petitions, namely 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 had already addressed the central issue.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings under Section 144B of the Act, were validly initiated and conducted, considering the prevailing legal framework and any relevant circulars or instructions from the CBDT? (Question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contentions: The assessee argued that the notices under Section 148 and the subsequent proceedings were without jurisdiction and contrary to the provisions of the Income Tax Act, 1961. They relied on the principle that statutory provisions cannot be overridden by instructions or circulars, and that such instructions, if issued to make statutory provisions otiose or obsolete, are invalid. Revenue's Contentions: The revenue, through its counsel, did not present separate arguments but implicitly supported the validity of the notices and proceedings. The judgment notes that the counsel for the parties were ad idem that the issue had been finally examined in prior judgments of the Court, suggesting the revenue did not contest the outcome based on those 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

CWP-5108-202

203

IN TH M/s Fastway C Deputy Comm CORAM: H

H Present: M M M M f

SANJEEV P

1.

Both th petition No.215 decided No.157 and oth held as b i o o 4(O&M)

Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

Citizen Cable Network Pvt.Ltd. Vs.

missioner of Income Tax, Centra **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Sunil K. Mukhi, Advocate Mr. Iqbal Roshan, Advocate for t Mr. Saurabh Kapoor, Sr. Standin Ms. Pridhi Sandhu, Jr. Standing C for respondent/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 obsolete. Legislative enactmen

AB AND HARYANA AT RH CWP-5108-2024(O&M) Date of Decision:28.10.2024 . . . . Petitioner al Circle-2, Ludhiana . . . . Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH the petitioner. ng Counsel and Counsel ) 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 nts having financial

) 4 r t t P , P a ) RASHMI 2024.10.29 12:39 I attest to the accuracy and integrity of this document

CWP-5108-202

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 i w 4(O&M)

Page 2 of 3 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 20. All the writ petition nterim order passed by the Cou with the present order.”

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. ns are allowed. The urt shall stand merged

RASHMI 2024.10.29 12:39 I attest to the accuracy and integrity of this document

CWP-5108-202

2.

Keepin terms. mutand Jurisdic 30.03.2 3. All pen

October 28, 20 rashmi 1. Whethe 2. Whethe 4(O&M)

Page 3 of 3 ng in view above, we allow this The observations and order pa dis to the present case. Ac ctional Assessing Officer 2023(P-2) as well as the consequ nding applications also stand disp

(SANJ 024 r speaking/reasoned?

Y r reportable?

s Writ Petition in the aforesaid assed above shall apply mutatis ccordingly, notices issued by under Section 148 dated uential proceedings are set aside. posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d s y d RASHMI 2024.10.29 12:39 I attest to the accuracy and integrity of this document

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