RAJESH MITTAL vs. DEPUTY COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/14518/2025HC Punjab & HaryanaPHHC01078122202520 May 2025Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MRS. JUSTICE MEENAKSHI I. MEHTA3 pages
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What did the High Court hold?

The High Court held that notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, were contrary to the provisions of the Act. The Court relied on its previous decisions in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. The reasoning was that circulars and instructions by the Board cannot override statutory provisions or make them obsolete. Legislative enactments with financial implications must be followed strictly. The Court found that the authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Instructions and circulars can only supplement statutory provisions. Consequently, 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 respondents were at liberty to follow the prescribed procedure. The writ petition was allowed in terms of the prior judgments, setting aside the notice dated 09.04.2024 and consequential proceedings.

What were the facts?

The petitioner, Rajesh Mittal, filed a writ petition challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The petitioner argued that these actions were taken without conducting a faceless assessment as mandated by Section 144B of the Act. The revenue contended that circulars and instructions issued by the Board could be used to override statutory provisions. The High Court was considering whether the faceless assessment procedure under Section 144B was mandatory and if the JAO's actions were valid. The case was decided based on prior judgments by a Coordinate Bench in similar matters.

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 and liable to be set aside? (Question of law and mixed fact and law, turning on Section 148 and Section 144B). Assessee's Contention: The faceless assessment procedure under Section 144B is mandatory, and proceedings initiated without adhering to it are invalid. The JAO's actions were without jurisdiction. Revenue's Contention: Circulars or instructions issued by the Board could be used to override statutory provisions or make them otiose. The revenue suggested a distinction from prior judgments, implying that the faceless assessment might not be strictly mandatory in all circumstances or that their actions were permissible under certain interpretations of the law.

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

151

Rajesh Mittal

Deputy Comm

CORAM: H

Present: M M

SANJEEV P 1.

N 2.

M Gupta, Advoc 3.

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

C D

Vs. missioner of Income Tax, Circle

HON’BLE MR. JUSTICE SAN HON’BLE MRS. JUSTICE ME Mr. Yash Gilhotra, Advocate for Mr. Nikhil Goyal, Advocate for t

*** RAKASH SHARMA, J.(Oral) Notice of motion. Mr. Saurabh Kapoor, Sr. Standi cate, accepts notice on behalf of t 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 NJAB AND HARYANA ARH CWP-14518-2025 (O&M) Date of Decision: 20.05.2025

…Petitioner Panchkla and others …Respondents NJEEV PRAKASH SHARMA EENAKSHI I. MEHTA the petitioner. ) ing Counsel with Ms. Muskaan 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 n l d f n a s e d

RAJESH KUMAR 2025.05.22 14:34 I attest the accuracy and authenticity of this order/judgment.

[2] CWP-14518-2025 (O&M)

make them otiose or obsolete. Legislative enactments having financial implications are required to be followed strictly and 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. RAJESH KUMAR 2025.05.22 14:34 I attest the accuracy and authenticity of this order/judgment.

[3] CWP-14518-2025 (O&M)

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 mutandis to the present case. Accordingly, notice issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, dated 09.04.2024 and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(MEENAKSHI I. MEHTA)

JUDGE 20.05.2025 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No RAJESH KUMAR 2025.05.22 14:34 I attest the accuracy and authenticity of this order/judgment.

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