MANMOHAN SINGH vs. UNION OF INDIA AND OTHERS

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CWP/10696/2024HC Punjab & HaryanaPHHC01061363202415 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE ALOK JAIN3 pages
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What did the High Court hold?

The High Court held that circulars or instructions issued by the Board cannot override statutory provisions or render them otiose. The Court agreed with the view taken by a Coordinate Bench in Jasjit Singh vs. Union of India and others, CWP No. 21509 of 2023, and Jatinder Singh Bhangu vs. Union of India and others, CWP No. 15745 of 2024. It was found that authorities cannot usurp legal provisions through circulars for their convenience, causing hardship to assessees and confusion. Instructions and circulars can only supplement statutory provisions. Consequently, notices issued by the JAO under Section 148 and proceedings initiated without conducting faceless assessments under Section 144B were found to be contrary to the Act. The notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and the order dated 30.03.2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure. The specific notice dated 28.03.2024 in the present case and consequential proceedings were also set aside.

What were the facts?

The petitioner, Manmohan Singh, has filed a writ petition before the Punjab and Haryana High Court. The issue pertains to notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The petitioner argues that these actions were taken without conducting a faceless assessment as mandated by Section 144B of the Act. The revenue, represented by the respondents, contended that certain circulars or instructions issued by the Board could be interpreted to allow for such proceedings. The High Court is considering whether the faceless assessment procedure under Section 144B is mandatory and if the notices and proceedings initiated by the JAO are valid in light of this provision.

What were the issues?

1. Whether notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated without conducting a faceless assessment as envisaged under Section 144B of the Act, 1961, are contrary to the provisions of the Act, 1961? (Question of law and mixed fact and law, concerning Section 148 and Section 144B of the Income Tax Act, 1961). Assessee's Contention: The petitioner argues that the notices and proceedings are invalid because they bypass the mandatory faceless assessment procedure prescribed under Section 144B of the Act. They rely on the principle that statutory provisions must be followed strictly and cannot be overridden by circulars or instructions. Revenue's Contention: The revenue suggested that the circulars or instructions issued by the Board might permit deviations from the faceless assessment procedure, implying that the JAO's actions could be justified. They sought to distinguish the present case from prior rulings.

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

278

Manmohan Si

Union of Indi

CORAM: H

Present: M

SANJEEV P 1.

L issue involved by this Court India and oth CWP No.1574 and others, de under: “ B c m f IN THE HIGH COURT OF PUN AT CHANDIGA C D ingh

Vs. a and others

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE ALO Mr. Sandeep Goyal, Advocate fo Mr. Saurabh Kapoor, Sr. Standin Ms. Pridhi Sandhu, Jr. Standing C

RAKASH SHARMA, J.(Oral) Learned counsel for the parties d in the present petition stands f in CWP No.21509 of 2023 title hers, decided on 29.07.2024, an 745 of 2024 titled as Jatinder Sin ecided on 19.07.2024. This Cour “16. We are in agreement with th Bench and hold that such circul could not have been issued to ove make them otiose or obsolete. financial implications are requi NJAB AND HARYANA ARH CWP-10696-2024 (O&M) Date of Decision: 15.10.2024

…Petitioner

…Respondents NJEEV PRAKASH SHARMA OK JAIN or the petitioner. ng Counsel along with Counsel for the revenue. ) are ad idem that the substantial finally examined and concluded ed as Jasjit Singh vs. Union of nd by the Coordinate Bench in ngh Bhangu vs. Union of India rt in Jasjit Singh (supra) held as he view taken by the Coordinate lar or instructions by the Board erride statutory provisions or to Legislative enactments having ired to be followed strictly and

l d f n a s e d

g d RAJESH KUMAR 2024.10.16 11:14 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP-10696-2024 (O&M)

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. 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.”

RAJESH KUMAR 2024.10.16 11:14 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP-10696-2024 (O&M)

Keeping in view above, we allow this Writ Petition in the aforesaid terms. The observations and order passed above shall apply mutatis mutandis to the present case. Accordingly, notice issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, dated 28.03.2024 and all consequential proceedings are set aside. 3.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(ALOK JAIN)

JUDGE 15.10.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No RAJESH KUMAR 2024.10.16 11:14 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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