ORCHIDS DIAMOND TOOLS PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX AND ORS

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CWP/11688/2025HC Punjab & HaryanaPHHC01064548202506 May 2025Bench: MRS. JUSTICE LISA GILL,MRS. JUSTICE SUDEEPTI SHARMA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition in terms of its previous judgments in Jatinder Singh Bhangu vs. Union of India and Jasjit Singh vs. Union of India. In those cases, a coordinate bench had allowed writ petitions on similar issues, granting liberty to the revenue to follow the prescribed procedure under the Act, 1961, and proceed accordingly if advised. The court noted that the petitioner's challenge was based on the same grounds as in the cited cases, and the revenue did not dispute the applicability of those precedents. Therefore, the present petition was disposed of in line with the earlier decisions, implying that the notice was set aside, but the revenue could re-issue it after adhering to the proper procedures.

What were the facts?

The petitioner, Orchids Diamond Tools Pvt. Ltd., challenged a notice dated March 22, 2025, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2017-2018. The petitioner argued that the issuing authority lacked jurisdiction due to a CBDT circular dated March 29, 2022, which purportedly granted exclusive power to the National Faceless Assessment Centre (NFAC) to issue such notices. The respondents, Assistant Commissioner of Income Tax and others, were represented. The case was heard by the High Court of Punjab and Haryana at Chandigarh.

What were the issues?

1. Whether the notice dated March 22, 2025, issued under Section 148 of the Income Tax Act, 1961, for AY 2017-2018 is invalid due to lack of jurisdiction of the issuing authority, considering the CBDT circular dated March 29, 2022? (Question of law) The assessee contended that the issuing authority lacked jurisdiction to issue the Section 148 notice, relying on the CBDT circular dated March 29, 2022, which, according to the assessee, vests exclusive power in the NFAC for issuing such notices. The revenue, represented by learned counsel, did not dispute the assessee's contention regarding the applicability of previous judgments on this issue.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

CWP-11688-2025 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 157

CWP-11688-2025 (O&M) Date of Decision:-06.05.2025 Orchids Diamond Tools Pvt. Ltd. ....Petitioner Vs. Asstt. Commissioner of Income, Central Circle I, Faridabad & ors. ...Respondents CORAM: HON'BLE MRS. JUSTICE LISA GILL HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: Mr. Nikhil Goyal and Mr. Rana Gurtej Singh, Advocates, for the petitioner. Mr.Varun Issar, Sr. Standing counsel with Ms. Pridhi Sandhu, Jr. Standing counsel for the respondent. *** SUDEEPTI SHARMA, J. 1. Challenge in the present petition is to notice dated 22.03.2025 issued under Section 148 of the Income Tax Act, 1961 (for short ‘Act 1961”) and all consequential actions, for AY 2017-2018. 2. Learned counsel for the petitioner contends that the issue involved in the present writ petition is covered by the judgment passed by a Co-ordinate Bench of this Court in the cases of Jatinder Singh Bhangu vs. Union of India and others, passed in CWP No. 15745-2024 and connected matter, decided on 19.07.2024 and Jasjit Singh vs. Union of India and others (CWP No. 21509- 2023 and other connected matters), decided on 29.07.2024 . 3. Learned counsel appearing for Union of India has also not disputed the same. 4. We have heard learned counsel for the parties and perused the whole records of the case. 5. The petitioner has challenged the notice dated 22.03.2025 issued Gaurav Arora 2025.05.12 14:16 I attest to the accuracy and integrity of this document

CWP-11688-2025 2 under Section 148 of the Act, 1961 and all consequential actions, for AY 2017- 2018 on the ground that the Issuing Authority had no jurisdiction to issue the same, in view of the circular/notification dated 29.03.2022 of the CBDT, wherein, it has been specifically enumerated that the NFAC has exclusive power to issue the notice under Section 148 of the Act, 1961. 6. A Co-ordinate Bench of this Court in Jatinder Singh Bhangu’s case (supra) and Jasjit Singh’s case (supra), allowed the writ petitions on the same issue, as raised in the present writ petition, by granting liberty to the revenue to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised. 7. In view of the above, the present writ petition is disposed of, in terms of Jatinder Singh Bhangu’s case (supra), decided on 19.07.2024 and Jasjit Singh’s case (supra), decided on 29.07.2024 8. All the pending applications, if any, also stand disposed of. (LISA GILL) (SUDEEPTI SHARMA) JUDGE JUDGE 06.05.2025

Gaurav Arora Whether speaking/reasoned : Yes/No Whether reportable : Yes/No Gaurav Arora 2025.05.12 14:16 I attest to the accuracy and integrity of this document

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