SAJJAN GUPTA vs. UNION OF INDIA AND OTHERS

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CWP/20074/2024HC Punjab & HaryanaPHHC01108066202427 August 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court, following its earlier decision in Jasjit Singh vs. Union of India, held that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments, especially those with financial implications, must be strictly followed. The Court found that by exercising powers under Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), authorities cannot usurp legal provisions for their convenience, causing hardship to assessees and confusion. Consequently, notices issued by the Joint Assessing Officer under Section 148 and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B were found to be contrary to the Act. The specific notices dated 07.04.2023 and consequential proceedings were set aside for want of jurisdiction. The respondents-revenue were granted liberty to follow the procedure laid down under the Act if so advised. All pending applications were disposed of.

What were the facts?

The petitioner, Sajjan Gupta, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The Income Tax Department, represented by the respondents, accepted notice. Both parties agreed that the issue had been adjudicated in a previous case, Jasjit Singh vs. Union of India and others, decided on 29.07.2024. In that case, the High Court had considered circulars and instructions issued by the Board and their impact on statutory provisions, particularly concerning faceless assessment under Section 144B. The specific notices and orders challenged in the present petition were dated 07.04.2023.

What were the issues?

1. Whether notices issued by the Joint Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act, 1961. Assessee's Contention: The assessee, by virtue of the precedent set in Jasjit Singh vs. Union of India, would argue that the notices and proceedings are invalid as they bypass the mandatory faceless assessment procedure. The High Court's previous ruling would be relied upon to assert that circulars and instructions cannot override statutory provisions, and that failure to adhere to Section 144B renders the actions without jurisdiction. Revenue's Contention: The judgment records that both counsel were 'ad idem' that the issue was finally adjudicated in Jasjit Singh vs. Union of India. Therefore, no distinct argument was recorded for the revenue in this specific petition, implying acceptance of the precedent.

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

(O&M)

Page 1 of 3 118 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH (O&M) Date of Decision: 27.08.2024 SAJJAN GUPTA . . . . Petitioner Vs. UNION OF INDIA AND OTHERS . . . . Respondents **** CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Present:

for the respondent(s) – Income tax department (through video conferencing mode). **** SANJEEV PRAKASH SHARMA, J.(Oral) 1. Notice of motion. 2. accepts notice on behalf of respondents/Income Tax Department. 3. Both the counsel are ad idem that the issue involved in the present petition stands finally adjudicated in view of the judgment passed by this Court in CWP No.21509 of 2023 titled as Jasjit Singh vs. Union of India and others, decided on 29.07.2024, wherein this Court held as under: “16. We are in agreement with the view taken by the Coordinate Bench and hold that such circular or LAVISHA 2024.08.28 14:54 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

(O&M)

Page 2 of 3 instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having financial be followed strictly and mandatorily. By exercising the powers contained 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 instructions and supplementing the statutory provisions and 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.” LAVISHA 2024.08.28 14:54 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

(O&M)

Page 3 of 3 4. 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 u/s 148 dated 07.04.2023 and consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE August 27, 2024 Lavisha 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No LAVISHA 2024.08.28 14:54 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

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