GURMAIL MEDI SHOP vs. DEPUTY COMMISSIONER OF INCOME TAX

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CWP/34890/2024HC Punjab & HaryanaPHHC01180874202420 December 2024Author: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, and the faceless assessment proceedings initiated under Section 144B, were contrary to the provisions of the Act and circulars. The Court followed the precedent set by its coordinate benches in Jasjit Singh and Jatinder Singh Bhangu. The reasoning was that instructions by the Board, while meant to supplement statutory provisions, cannot override them or make them obsolete. Authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. Therefore, the notices dated 28.02.2023, 16.03.2023, 30.03.2023, 20.03.2024, and 30.03.2023, along with the notice dated 10.01.2024 (Annexure P-2) issued under Section 148, and all consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act if so advised. The writ petition was allowed.

What were the facts?

The petitioner, Medi Shop, filed a writ petition challenging a notice dated 10.01.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and all consequential assessment proceedings. The petitioner argued that the notice and proceedings were invalid. The revenue, represented by the Deputy Commissioner of Income Tax, accepted notice. The High Court noted that similar issues had been decided by coordinate benches in previous cases, specifically Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, both decided on 19.07.2024. The High Court was asked to decide if the present petition should be treated similarly.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings initiated under Section 144B, are liable to be set aside for want of jurisdiction, particularly when they are found to be contrary to the provisions of the Act and circulars issued by the Board. Assessee's Contention: The petitioner argued that the notice under Section 148 and the subsequent proceedings were invalid. The judgment implies the petitioner relied on the reasoning of previous coordinate bench decisions. Revenue's Contention: The revenue, through its Senior Standing Counsel, accepted notice. The judgment does not explicitly record separate arguments from the revenue but notes that the counsel were 'ad idem' (of the same mind) with the petitioner regarding the final examination of the issue based on prior judgments.

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

131 IN TH GURMAIL M

DEPUTY CO LUDHIANA

CORAM: H

H

Present: M M M M f * SANJEEV PR

1.

N

2.

M on behalf of th

3.

B present petitio No.21509 of decided on 29 2024 titled a decided on 19

C i o o HE HIGH COURT OF PUNJA CHANDIGAR

CWP-3 Date of MEDI SHOP

V OMMISSIONER OF INCOME

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ

Mr. Sunil K. Mukhi, Advocate fo Mr. Saurabh Kapoor, Senior Stan Ms. Pridhi Sandhu, Junior Standi Ms. Muskaan Gupta, Advocate for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Saurabh Kapoor, Senior St he respondents/Income Tax Dep Both the counsel are ad idem on stands finally examined and c f 2023 titled as Jasjit Singh vs 9.07.2024, and by the Coordina as Jatinder Singh Bhangu vs. 9.07.2024. This Court in Jasjit Si “16. We are in agreement with Coordinate Bench and hold t instructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen AB AND HARYANA AT RH 34890-2024 (O&M) f Decision:20.12.2024

..…...Petitioner(s) V/s. TAX, CENTRAL, CIRCLE-2,

…......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH or the petitioner. nding Counsel, with ing Counsel and Department. tanding Counsel, accepts notice partment. that the issue involved in the concluded by this Court in CWP s. Union of India and others, ate Bench in CWP No.15745 of . Union of India and others, Singh (supra) held as under: the view taken by the that such circular or not have been issued to to make them otiose or nts having financial

) e e P , f , Suresh Kumar 2025.01.08 13:15 I attest to the accuracy and integrity of this document

CWP-34890-202

i m S S a s a t a s i 1 o s w 1 C u p f o p d 3 f 1 l A 2 o p

4.

K aforesaid term 024 (O&M) implications 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 implementation.

17.

In view of the aforesaid d occasion to distinguish or take suggested by the learned counse what has already been held by th

18.

Keeping in view the law Coordinate Bench (supra), notic under Section 148 of the proceedings initiated thereafter w faceless assessment as envisage of the Act, 1961, have been foun 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-revenue w liberty to follow the procedure a Act, 1961 and proceed according

20.

All the writ petitions are order passed by the Court shall present order.” Keeping in view above, we a ms. The observations and order p e 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 discussion, there is no e a different view as el for the revenue from he Coordinate Bench. w laid down by the ces issued by the JAO Act, 1961 and the without conducting the ed under Section 144B d to be contrary to the nd accordingly notices 23, 20.03.2024 and 03.2023, are set aside would be, however, at as laid down under the gly, if so advised. allowed. The interim stand merged with the allow this Writ Petition in the passed above shall apply mutatis e s Suresh Kumar 2025.01.08 13:15 I attest to the accuracy and integrity of this document

CWP-34890-202

mutandis to (Annexure P- Income Tax aside.

5.

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December 20 Ess Kay

Whether speak Whether Repor 024 (O&M) the present case. According -2) issued by the Jurisdictional A Act, 1961 and all consequenti All pending applications also stan [SANJEEV 0, 2024

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king / reasoned :

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Y gly, notice dated 10.01.2024 Assessing Officer u/s 148 of the ial proceedings thereof are set nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No 4 e t Suresh Kumar 2025.01.08 13:15 I attest to the accuracy and integrity of this document

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