NIRMALA KHANDELWAL vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1 AND OTHERS

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CWP/19684/2025HC Punjab & HaryanaPHHC01108082202516 July 2025Author: MRS. JUSTICE LISA GILL,MRS. JUSTICE MEENAKSHI I. MEHTA3 pages
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What did the High Court hold?

The High Court allowed the writ petition, disposing of it in terms of the judgments in Jatinder Singh Bhangu's case and Jasjit Singh's case. These prior judgments had allowed writ petitions on the same issue, finding that Section 151A of the Act, read with the notification dated 29.03.2022, clearly indicates that the scheme of faceless assessment applies from the stage of show cause notice under Section 148. The Court reasoned that the object of faceless assessment would be defeated if a jurisdictional Assessing Officer issued such notices. While circulars and instructions from the Board cannot override statutory provisions, the mandate of Section 144B and 151A, read with the relevant notification, was found to be lucid and unambiguous. The revenue was granted liberty to follow the procedure as laid down under the Act, 1961, and proceed accordingly if so advised. No issue was expressly left undecided.

What were the facts?

The petitioner, Nirmala Khandelwal, challenged a notice dated 28.10.2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2022-2023. The challenge was based on the assertion that the issuing authority lacked jurisdiction due to a CBDT circular dated 29.03.2022. This circular purportedly grants exclusive power to the National Faceless Assessment Centre (NFAC) to issue such notices. The respondents, represented by the Deputy Commissioner of Income Tax, Central Circle-1 and others, did not dispute the petitioner's contentions.

What were the issues?

1. Whether the notice dated 28.10.2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2022-2023 is invalid due to lack of jurisdiction by the issuing authority, in light of the CBDT circular dated 29.03.2022, which allegedly vests exclusive power in the National Faceless Assessment Centre (NFAC). Assessee's Contention: The issuing authority lacked jurisdiction as per the CBDT circular dated 29.03.2022, which mandates that the NFAC has exclusive power to issue notices under Section 148. The petitioner relies on the judgments in Jatinder Singh Bhangu vs. Union of India and others (CWP No. 15745-2024) and Jasjit Singh vs. Union of India and others (CWP No. 21509 of 2023). Revenue's Contention: The revenue did not dispute the petitioner's contentions.

Which sections of the Income-tax Act were involved?

Section 148,Section 151A,Section 144B

AI-generated summary — verify with the full judgment below

1

CWP-19684-2025

165 IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH

CWP-19684-2025

Date of Decision: July 16, 2025

NIRMALA KHANDELWAL

.....Petitioner

Versus

DEPUTY COMMISSIONER OFINCOME TAX, CENTRAL CIRCLE 1AND OTHERS

..... Respondents

CORAM:- HON'BLE MRS. JUSTICE LISA GILL

HON'BLE MRS. JUSTICE MEENAKSHI I. MEHTA

Present: Mr. Puneet Agrawal, Advocate; Mr. Yuvraj Singh, Advocate and Ms. Shruti Garg, Advocate for the petitioner.

Mr. Vaibhav Gupta, Advocate, for the respondent-Income Tax

Department.

**** LISA GILL, J.

1.

Challenge in the present petition is to notice dated 28.10.2024 issued under Section 148 of the Income Tax Act, 1961 (for short ‘Act 1961”) and all consequential proceedings for the Assessment Year 2022-2023, on the ground that Issuing Authority had no juri iction to issue the same, in view of circular/notification dated 29.03.2022 of the CBDT, wherein, it has been specifically enumerated that National Faceless Assessment Centre (NFAC) has exclusive power to issue notice under Section 148 of the Act, 1961. 2. Learned counsel for petitioner contends that the issue involved in the present writ petition is covered by judgment passed by a Co-ordinate RITU SHARMA 2025.07.18 15:52 I attest to the accuracy and integrity of this document

2

CWP-19684-2025 India and others, passed in CWP No. 15745-2024 and connected matter, Co-ordinate Bench of this Court in Jatinder Singh Bhangu’s case (supra) and Jasjit Singh’s case (supra), allowed the writ petitions on the same issue, as raised in the present writ petition, by granting liberty to the revenue to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised. Relevant portion of decision dated 19.07.2024 in Jatinder Singh Bhangu’s case (supra) reads as under:-

“15. From the perusal of Section 151A, it is quite evident that scheme of faceless assessment is applicable from the stage of show cause notice under Section 148 as well as 148A. Clause 3(b) of notification dated 29.03.2022 issued under Section 151A clearly provides that scheme would be applicable to notice under Section 148. Even otherwise, it is a settled proposition of law that assessment proceedings commence from the stage of issuance of show cause notice. The object of introduction of faceless assessment would be defeated if show cause notice under Section 148 is issued by Juri ictional Assessing Officer. The respondents are heavily placing reliance upon office memorandum and letter issued by departmental authorities. It is axiomatic in tax jurisprudence that circulars, instructions and letters issued by Board or any other authority cannot override statutory provisions. The circulars are binding upon authorities and Courts are not bound by circulars. The mandate of Section 144B, 151A read with notification dated 29.03.2022 issued thereunder is quite lucid. There is no ambiguity in the language of statutory provisions, thus, office memorandum or any other instruction issued by Board or any other authority cannot be relied upon.”

RITU SHARMA 2025.07.18 15:52 I attest to the accuracy and integrity of this document

3

CWP-19684-2025

6.

In view of the above, present writ petition is disposed of, in terms of Jatinder Singh Bhangu’s case (supra), decided on 19.07.2024 and Jasjit Singh’s case (supra), decided on 29.07.2024. 7. All the pending applications, if any, also stand disposed of accordingly. (LISA GILL)

JUDGE

(MEENAKSHI I. MEHTA) July 16, 2025

JUDGE Rts Whether speaking/reasoned: Yes/No Whether reportable: Yes/No

RITU SHARMA 2025.07.18 15:52 I attest to the accuracy and integrity of this document

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