C.M. BUILDERS AND DEVELOPERS vs. INCOME TAX OFFICER AND ORS.

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CWP/10048/2023HC Punjab & HaryanaPHHC01059873202318 November 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that instructions or circulars issued by the Board cannot override statutory provisions and cannot be issued to make them otiose or obsolete. Legislative enactments must be followed strictly. The authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship to assessees and confusion. Instructions and circulars can only supplement statutory provisions for their implementation. In view of the precedent set in Jasjit Singh Bhangu vs. Union of India and others, the Court found no occasion to take a different view. Consequently, notices issued under Section 148 of the Act, 1961, and the proceedings initiated thereafter, including faceless assessments under Section 144B, were found to be contrary to the provisions of the Act and 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 application for preponement was allowed, and the writ petition was allowed in terms of the aforesaid observations and order.

What were the facts?

The petitioner, C.M. Builders and Developers Partnership Firm, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The petitioner sought preponement of the hearing. Both parties agreed that the issue was covered by a previous decision of the High Court in Jasjit Singh Bhangu vs. Union of India and others (CWP No. 21550 of 2023), decided on July 29, 2024. In that case, a Coordinate Bench had held that instructions or circulars issued by the Board could not override statutory provisions. The present writ petition (CWP-10048-2023) and the application for preponement (CM-18523-CWP-2024) were considered together. The High Court noted that the notices and proceedings were found to be contrary to the provisions of the Act and were set aside for want of jurisdiction.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings, including faceless assessments under Section 144B, are valid when found to be contrary to the provisions of the Act and established precedents. Assessee's Contentions: The assessee argued that the notices and proceedings were contrary to the Act and the established legal position, relying on the decision in Jasjit Singh Bhangu vs. Union of India and others. The assessee sought to have these notices and proceedings set aside. Revenue's Contentions: The revenue, through its counsel, agreed that the matter was concluded by the decision in Jasjit Singh Bhangu vs. Union of India and others. They did not present any arguments to distinguish the present case from the precedent.

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-10048-202 104-1 IN TH C.M. BUILDE INCOME TA CORAM: H

H Present: M

f SANJEEV P

1.

Applica seeking 2. Both th petition No.215 decided Singh B Jasjit S b i o 23 (O&M) Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

ERS AND DEVELOPERS, PAR Vs.

AX OFFICER AND OTHERS **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Rana Gurtej Singh, Advocate Ms. Gauri Neo Rampal, Sr. Stand for the respondents/Revenue. **** RAKASH SHARMA, J.(Oral) ation No. CM-18523-CWP-2024 g preponement of the main case. 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 Bhangu vs. Union of India an Singh (supra) held as under: “16. We are in agreemen by the Coordinate Bench and hol nstructions by the Board could n override statutory provisions or t AB AND HARYANA AT RH CM-18523-CWP-2024 in/and CWP-10048-2023 (O&M) Date of Decision: 18.11.2024 RTNERSHIP FIRM . . . . Petitioner . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH e for the petitioner. ding Counsel (through VC) ) 4 has been filed by the petitioner e issue involved in the present oncluded by this Court in CWP h vs. Union of India and others, Coordinate Bench in Jatinder nd others (supra). This Court in nt with the view taken ld that such circular or not have been issued to to make them otiose or

d ) 4 r s r t P , r n MOHIT GOYAL 2024.11.19 11:03 I attest to the accuracy and integrity of this document

CWP-10048-202 o 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 23 (O&M) Page 2 of 3 obsolete. Legislative enactmen 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 nts having financial 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.

MOHIT GOYAL 2024.11.19 11:03 I attest to the accuracy and integrity of this document

CWP-10048-202 i w 3. Accord CM-18 4. Keepin terms. mutand issued Jurisdic proceed 5. All pen

November 18, Mohit goyal 1. Whethe 2. Whethe 23 (O&M) Page 3 of 3 20. All the writ petition nterim order passed by the Cou with the present order.” dingly, we allow the prayer as 523-CWP-2024 stands allowed. ng in view above, we allow this The observations and order pa dis to the present case. Accord under Section 148 of the ctional Assessing Officer as dings are set aside. nding applications also stand disp

(SANJ , 2024 r speaking/reasoned?

Y r reportable?

Y ns are allowed. The urt shall stand merged above, and the application No. Case is taken on board today. s Writ Petition in the aforesaid assed above shall apply mutatis dingly, notice dated 31.03.2023 Income Tax Act, 1961 by s well as the consequential posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

. d s 3 y l MOHIT GOYAL 2024.11.19 11:03 I attest to the accuracy and integrity of this document

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