SATYA BHAMA DALMIA vs. PR COMMISSIONER OF INCOME TAX, LUDHIANA AND ANOTHER

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CWP/31258/2024HC Punjab & HaryanaPHHC01160249202420 November 2024Author: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition. It held that instructions issued by the Board under Section 119 of the Act cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be followed mandatorily. The Court reiterated the view of coordinate benches that administrative instructions cannot usurp legal provisions for the convenience of authorities, causing hardship and confusion to assessees. Therefore, notices issued under Section 148 of the Income Tax Act, 1961, and all consequential proceedings initiated without conducting a faceless assessment as envisaged by Section 144B, were found to be contrary to the provisions of the Act. Consequently, the notice dated 23.03.2024 and all subsequent proceedings were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act and proceed accordingly, if advised.

What were the facts?

The petitioner, Satya Bhama Madalmia, challenged a notice dated 23.03.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent consequential proceedings. The petitioner argued that these actions were initiated without conducting a faceless assessment as envisaged by Section 144B of the Act, rendering them contrary to statutory provisions. The revenue, represented by the Senior Standing Counsel, accepted notice. The High Court noted that similar issues had been decided by coordinate benches in previous cases, Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, which dealt with the validity of faceless assessments and the overriding nature of statutory provisions over administrative instructions.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated without conducting a faceless assessment as per Section 144B of the Act, are valid and legally sustainable? (Question of law and mixed fact/law, turning on Sections 148 and 144B). Assessee's Contention: The proceedings initiated under Section 148 and subsequent actions are invalid because they were not conducted through the faceless assessment scheme mandated by Section 144B of the Act. The petitioner relied on the principle that administrative instructions cannot override statutory provisions and that legislative enactments with financial implications must be followed strictly. Revenue's Contention: The revenue's counsel accepted notice and did not present separate arguments, but the judgment indicates they were aware of and did not contest the precedents relied upon by the petitioner.

Which sections of the Income-tax Act were involved?

Section 148,Section 144B,Section 119

AI-generated summary — verify with the full judgment below

135 IN TH SATYA BHAM

PR. COMMIS

CORAM: H

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Present: M M

f

* SANJEEV PR

1.

N

2.

M behalf of the r

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

C i o o i m HE HIGH COURT OF PUNJA CHANDIGAR

CWP-3 Date of MA DALMIA

V SSIONER OF INCOME TAX, LU

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. Rishabh Kapoor, Advocate f Mr. Ranvijay Singh, Senior Stand for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Ranvijay Singh, Senior Stan respondents/Income Tax Departm 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 implications are required to be mandatorily. By exercising the AB AND HARYANA AT RH 31258-2024 (O&M) f Decision:20.11.2024

..…...Petitioner(s) V/s. UDHIANA AND ANOTHER …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH for the petitioner. ding Counsel, Department. nding Counsel, accepts notice on ment. 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 followed strictly and powers contained in ) n e P , f , Suresh Kumar 2024.11.22 09:21 I attest to the accuracy and integrity of this document

CWP-31258-202

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 mutandis to (Annexure P- 024 (O&M) 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

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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.

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The respondents-revenue w liberty to follow the procedure a Act, 1961 and proceed according

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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 the present case. According -2) issued by the Jurisdictional A 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 gly, notice dated 23.03.2024 Assessing Officer u/s 148 of the e s 4 e Suresh Kumar 2024.11.22 09:21 I attest to the accuracy and integrity of this document

CWP-31258-202

Income Tax aside.

5.

A

November 20 Ess Kay

Whether speak Whether Repor 024 (O&M) Act, 1961 and all consequenti All pending applications also stan [SANJEEV 0, 2024

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king / reasoned :

Y rtable

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Y ial proceedings thereof are set nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No t Suresh Kumar 2024.11.22 09:21 I attest to the accuracy and integrity of this document

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