LSL TOOLS PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS

PDF · subscribers
CWP/11686/2025HC Punjab & HaryanaPHHC01065268202529 April 2025Author: MR. JUSTICE SANJEEV PRAKASH SHARMA,MRS. JUSTICE MEENAKSHI I. MEHTA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition. The Court reiterated its agreement with the view taken by a co-ordinate bench in Jasjit Singh (supra), holding 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. The Court found that the authorities cannot usurp legal provisions for their convenience, causing hardship to assessees, and that instructions and circulars can only supplement statutory provisions. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings, when initiated without conducting faceless assessment as per Section 144B, were held to be contrary to the Act. The specific notices and orders challenged in the cited cases were set aside for want of jurisdiction. Applying this ratio mutatis mutandis to the present case, the High Court set aside the notice dated 22.03.2025 issued under Section 148 and all consequential proceedings. The respondents were granted liberty to follow the prescribed procedure if advised. The operative direction was to set aside the notice and consequential proceedings.

What were the facts?

The petitioner, LSL Tools Private Limited, filed a writ petition before the High Court of Punjab & Haryana at Chandigarh challenging a notice dated 22.03.2025 issued by the Assistant Commissioner of Income Tax, Central Circle – 1, Faridabad, under Section 148 of the Income Tax Act, 1961, and all consequential proceedings. The respondents, the Income Tax Department, accepted notice. Both parties agreed that the issue had been previously decided by the High Court in CWP No.21509 of 2023 (Jasjit Singh Versus Union of India and others) and a co-ordinate bench in CWP No.15745 of 2024 (Jatinder Singh Bhangu Versus Union of India and others). The High Court in the cited cases had examined the validity of notices issued under Section 148 and subsequent proceedings without conducting faceless assessments as envisaged under Section 144B of the Act.

What were the issues?

1. Whether notices issued by the Joint Assessing Officer (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 and liable to be set aside? (Mixed question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The petitioner, through their counsel, relied on the judgments of this Court in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra), arguing that the present case is identical and should be decided on the same lines. They contended that notices issued and proceedings initiated without faceless assessment are invalid. Revenue's Contention: The revenue, through their counsel, accepted notice and did not dispute that the issue had been concluded by previous judgments of the High Court. They did not present any arguments to distinguish the present case from the precedents cited by the petitioner.

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

Cause title — parties, addresses and appearances
138 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP No.11686 of 2025 Date of Decision: 29.04.2025 LSL Tools Private Limited …..Petitioner. Versus Assistant Commissioner of Income Tax, Central Circle – 1 Faridabad and others .....Respondents. CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MRS. JUSTICE MEENAKSHI I. MEHTA ***** Present:- Ms. Kajal Garg, Advocate for Mr. Nikhil Goyal, Advocate for the petitioner. SANJEEV PRAKASH SHARMA, J.(Oral) 1. Notice of motion. 2. Mr. Yogesh Putney, Senior Standing Counsel and Mr. Vaibhav Gupta, Standing Counsel, accept notice on behalf of the respondent(s)- Income Tax Department. 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 Versus Union of India and others”, decided on 29.07.2024 and by the Co-ordinate Bench in CWP No.15745 of 2024 titled as “Jatinder Singh Bhangu Versus Union of India and others”, decided on 19.07.2024. This Court in Jasjit Singh’s YAG DUTT 2025.05.02 13:18 I attest to the accuracy and authenticity of this

order/judgment

CWP No.11686 of 2025 -2-

case (supra) held as under:- “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. YAG DUTT 2025.05.02 13:18 I attest to the accuracy and authenticity of this order/judgment

CWP No.11686 of 2025 -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 afore-said terms. The observations and order passed above shall apply mutatis mutandis to the present case. Accordingly, notice dated 22.03.2025 (Annexure P-2) issued by respondent No.1-Assistant Commissioner of Income Tax, Central Circle – 1 Faridabad, under Section 148 of the Income Tax Act, 1961 and all consequential proceedings thereof are set-aside.

(SANJEEV PRAKASH SHARMA)

JUDGE

(MEENAKSHI I. MEHTA) April 29, 2025

JUDGE Yag Dutt

Whether speaking/reasoned: Yes/No

Whether Reportable: Yes/No YAG DUTT 2025.05.02 13:18 I attest to the accuracy and authenticity of this order/judgment

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →