M/S BABU RAM AND SONS SARAF vs. UNION OF INDIA AND OTHERS

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CWP/10864/2024HC Punjab & HaryanaPHHC01061895202403 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that it was in agreement with the view taken by a Coordinate Bench in similar cases. It ruled that circulars or instructions issued by the Board cannot override statutory provisions or make them otiose. Financial implications require statutory enactments to be followed strictly. The Court found that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion. Instructions and circulars can only supplement statutory provisions for their implementation. Consequently, notices issued by the JAO under Section 148 of the Act and proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act 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 procedure laid down under the Act. The specific notice in this case, dated 08.04.2024, and consequential proceedings were also set aside. The ratio is that faceless assessment is a mandatory statutory requirement, and deviations without legal basis are unsustainable.

What were the facts?

The petitioner, M/s Babu Ram & Sons Saraf, filed a writ petition before the Punjab and Haryana High Court. The petition challenged notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The core of the challenge was that these actions were taken without conducting a faceless assessment as mandated by Section 144B of the Act. The High Court noted that the issue was identical to those decided in previous writ petitions, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) and CWP No. 1574 of 2024 (Jatinder Singh Bhangu vs. Union of India and others), decided on July 29, 2024, and July 19, 2024, respectively. The revenue was represented by Ms. Urvashi Dhugga, Sr. Standing Counsel.

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, are contrary to the provisions of the Act, 1961? (Question of law and mixed fact and law, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's contention: The assessee argued, by reference to prior judgments of a Coordinate Bench, that circulars or instructions by the Board cannot override statutory provisions or render them obsolete. Faceless assessments are statutorily mandated, and deviations cause confusion and hardship. The authorities cannot usurp legal provisions for their convenience. Revenue's contention: The revenue suggested that there was a basis to distinguish the present case from the prior judgments of the Coordinate Bench. The judgment does not record any specific authorities, circulars, or precedents relied upon by the revenue.

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

247

I M/s Babu Ram

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 m a IN THE HIGH COURT OF PUN AT CHANDIGA C D m & Sons Saraf

Vs. a and others

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Sandeep Goyal, Advocate fo Ms. Urvashi Dhugga, Sr. Standin ***

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 mandatorily. By exercising the po and 120 of the Act, 1961 as we NJAB AND HARYANA ARH CWP-10864-2024 (O&M) Date of Decision: 03.10.2024

…Petitioner

…Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH or the petitioner. ng 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 owers contained in Sections 119 ll as Section 144B (7 & 8), the l d f n a s e d

g d 9 e RAJESH KUMAR 2024.10.04 09:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP-10864-2024 (O&M)

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.”

Keeping in view above, we allow this Writ Petition in the aforesaid terms. The observations and order passed above shall apply mutatis RAJESH KUMAR 2024.10.04 09:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP-10864-2024 (O&M)

mutandis to the present case. Accordingly, notice issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, dated 08.04.2024 and all consequential proceedings are set aside. 3.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 03.10.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No

RAJESH KUMAR 2024.10.04 09:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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