NATIONAL EDUCATIONAL SOCIETY vs. ITO EXEMPTION WARD AMBALA AND OTHERS

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CWP/16432/2025HC Punjab & HaryanaPHHC01088804202529 May 2025Bench: MRS. JUSTICE LISA GILL,MRS. JUSTICE SUDEEPTI SHARMA2 pages
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What did the High Court hold?

The High Court allowed the writ petition, disposing of it in terms of the judgments passed by a Co-ordinate Bench in Jatinder Singh Bhangu's case (decided on 19.07.2024) and Jasjit Singh's case (decided on 29.07.2024). These prior judgments 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 so advised. The reasoning was based on the petitioner's contention that the issuing authority lacked jurisdiction due to the CBDT circular dated 29.03.2022, which was not disputed by the revenue. The ratio decidendi is that notices issued under Section 148 and Section 148A by an authority lacking the prescribed jurisdiction, as per relevant circulars, are liable to be quashed. The operative direction was to dispose of the petition in terms of the aforementioned precedents, implying the quashing of the impugned notices and order, with liberty to the revenue to re-initiate proceedings if they choose to follow the correct procedure.

What were the facts?

The petitioner, National Educational Society, challenged notices dated 09.04.2024 (Section 148) and 20.03.2024 (Section 148A(b)), and an order dated 09.04.2024, along with all consequential actions, pertaining to Assessment Year 2017-2018. The challenge was based on the assertion that the issuing authority lacked jurisdiction due to a CBDT circular dated 29.03.2022, which purportedly grants exclusive power to the National Faceless Assessment Centre (NFAC) to issue notices under Section 148 of the Income Tax Act, 1961. The revenue, represented by the Income Tax Officer, Exemption Ward Ambala & ors., did not dispute the petitioner's contention regarding the applicability of previous judgments.

What were the issues?

1. Whether the notices issued under Section 148 and Section 148A(b) of the Income Tax Act, 1961, and the consequential order dated 09.04.2024, are invalid due to lack of jurisdiction of the issuing authority, in light of the CBDT circular dated 29.03.2022, which allegedly vests exclusive power in the NFAC for issuing Section 148 notices? (Question of law and mixed fact and law, turning on Section 148 and Section 148A of the Act, 1961). Assessee's Contention: The petitioner argued that the issuing authority lacked jurisdiction to issue the impugned notices and order, citing the CBDT circular dated 29.03.2022, which purportedly states that the NFAC has exclusive power to issue notices under Section 148 of the Act, 1961. The petitioner relied on judgments from a Co-ordinate Bench in Jatinder Singh Bhangu vs. Union of India and others (CWP No. 15745-2024) and Jasjit Singh vs. Union of India and others (CWP No. 21509-2023). Revenue's Contention: The learned counsel for the Union of India did not dispute the petitioner's contention.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

CWP-16432-2025 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 168 CWP-16432-2025 (O&M) Date of Decision:-29.05.2025 National Educational Society ....Petitioner Vs. Income Tax Officer, Exemption Ward Ambala & ors. ...Respondents CORAM: HON'BLE MRS. JUSTICE LISA GILL HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: Mr. Dhananjay Singh and Mr. Rohit Pundir, Advocates for the petitioner. Mr. Saurabh Kapoor, Sr. Standing counsel with Ms. Muskan Gupta, Advocate for the respondents. *** SUDEEPTI SHARMA, J. 1. Challenge in the present petition is to notice dated 09.04.2024 issued under Section 148 of the Income Tax Act, 1961 (for short ‘Act 1961”); notice dated 20.03.2024 issued under Section 148 A (b) of the Act, 1961; order dated 09.04.2024 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. Gaurav Arora 2025.06.06 15:35 I attest to the accuracy and integrity of this document

CWP-16432-2025 (O&M) 2 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 09.04.2024 issued under Section 148 of the Act, 1961; notice dated 20.03.2024 issued under Section 148 A (b) of the Act, 1961; order dated 09.04.2024 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 29.05.2025

Gaurav Arora Whether speaking/reasoned : Yes/No Whether reportable : Yes/No Gaurav Arora 2025.06.06 15:35 I attest to the accuracy and integrity of this document

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