SUPREME PETROFOAM PRIVATE LIMITED vs. UNION OF INDIA AND OTHERS

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CWP/22817/2024HC Punjab & HaryanaPHHC01120224202409 September 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court allowed the writ petition, setting aside the notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, dated March 15, 2024, and all consequential proceedings. The Court reiterated its agreement with the view taken by a Coordinate Bench that circulars or instructions issued by the Board cannot override statutory provisions or make them obsolete. The Court held that authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions for their implementation. The Court found that notices issued under Section 148 and subsequent faceless assessment proceedings initiated under Section 144B were contrary to the provisions of the Act, 1961, and thus set aside. The Revenue was granted liberty to follow the procedure laid down under the Act, 1961, and proceed accordingly, if so advised. The interim orders were merged with the final order. The operative directions were to set aside the notices and consequential proceedings and allow the writ petition.

What were the facts?

The petitioners, Petrofoam Private Limited, challenged notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, dated March 15, 2024, and consequential proceedings. The Revenue, represented by the Income Tax Department, accepted notice. The High Court noted that similar issues had been decided by coordinate benches in previous cases, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India) and CWP No. 15745 of 2023 (Jatinder Singh Bhangu vs. Union of India), both decided on July 9, 2024. The Court referred to its own prior judgment in Jasjit Singh, which held that circulars or instructions from the Board could not override statutory provisions or render them obsolete. The Court also considered the implications of Sections 119, 120, and 144B (7 & 8) of the Act.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and consequential proceedings, including those initiated under faceless assessment as envisaged by Section 144B (7 & 8), are valid when they are found to be contrary to the provisions of the Act, 1961, and the instructions issued by the JAO dated 28.02.2023, 16.03.2023, 20.03.2023, 30.03.2023, and 30.03.2024. Assessee's Contention: The assessee implicitly argued that the notices and proceedings were invalid, relying on the High Court's prior decisions which held that administrative instructions cannot override statutory provisions and that faceless assessment procedures, if not implemented correctly or if contrary to law, would vitiate the proceedings. The assessee's petition was allowed based on these prior judgments. Revenue's Contention: The Revenue, through its Senior Standing Counsel, accepted notice and did not appear to contest the matter, implicitly conceding to the High Court's prior rulings on similar issues. The judgment states that both counsel were 'ad idem' that the issue was finally examined and concluded by the Court in prior cases.

Which sections of the Income-tax Act were involved?

Section 148,Section 119,Section 120,Section 144B

AI-generated summary — verify with the full judgment below

135 IN TH SUPREME AUTHORIZED

UNION OF I DEPARTMEN NEW DELHI

CORAM: H

Present: M

M f

* SANJEEV PR

1.

N 2. M behalf of the r 3. B present petiti CWP No.215 decided on 29 2024 titled a decided on 19

C i o o HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of PETROFOAM PRIVATE ED REPRESENTATIVE BALJIND

V INDIA THROUGH MINISTRY NT THROUGH REVENUE SE AND OTHERS HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. Prateek Gupta, Advocate for Mr. Ranvijay Singh, Senior Stand for the respondents/Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Ranvijay Singh, Senior Stan respondents/Income Tax Departm Both the counsel are ad idem ion stands finally examined an 509 of 2023 titled as Jasjit Singh 9.07.2024, and by the Coordina as Jatinder Singh Bhangu vs. 9.07.2024. This Court in Jasjit Si “16. We are in agreement with Coordinate Bench and hold t instructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen AB AND HARYANA AT RH 22817-2024 (O&M) f Decision:09.09.2024 LIMITED THROUGH ITS DER KUMAR SINGLA

..…...Petitioners (s) V/s. OF FINANCE, INCOME TAX ECRETARY, NORTH BLOCK, …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH r the petitioner. ding Counsel, Department. nding Counsel, accepts notice on ment. that the issue involved in the nd concluded by this Court in h vs. Union of India and others, ate Bench in CWP No.15745 of . Union of India and others, Singh (supra) held as under: the view taken by the that such circular or not have been issued to to make them otiose or nts having financial S ) X

) n e n , f , Suresh Kumar 2024.09.10 09:36 I attest to the accuracy and integrity of this document

CWP-22817-202

i m S S a s a t a s i 1 o s w 1 C u p f o p d 3 f 1 l A 2 o p 4. K aforesaid term 024 (O&M) Page 2 of 3

implications are required to be mandatorily. By exercising the Sections 119 and 120 of the A Section 144B (7 & 8), the a allowed to usurp the legal pro satisfaction and convenience ca assessees. It also leaves confusio taxpayers. In the opinion of th and circulars can be issued on supplementing the statutory pro implementation. 17. In view of the aforesaid d occasion to distinguish or take suggested by the learned counse what has already been held by th 18. Keeping in view the law Coordinate Bench (supra), notic under Section 148 of the proceedings initiated thereafter w faceless assessment as envisage of the Act, 1961, have been foun provisions of the Act, 1961 an dated 28.02.2023, 16.03.202 30.03.2023 and order dated 30. for want of jurisdiction. 19. The respondents-revenue w liberty to follow the procedure a Act, 1961 and proceed according 20. All the writ petitions are order passed by the Court shall present order.” Keeping in view above, we a ms. The observations and order p e followed strictly and powers contained in Act, 1961 as well as authorities cannot be ovisions to their own ausing hardship to the on in the minds of the his Court, instructions nly for the purpose of ovisions and for their discussion, there is no e a different view as el for the revenue from he Coordinate Bench. w laid down by the ces issued by the JAO Act, 1961 and the without conducting the ed under Section 144B d to be contrary to the nd accordingly notices 23, 20.03.2024 and 03.2023, are set aside would be, however, at as laid down under the gly, if so advised. allowed. The interim stand merged with the allow this Writ Petition in the passed above shall apply mutatis e s Suresh Kumar 2024.09.10 09:36 I attest to the accuracy and integrity of this document

CWP-22817-202

mutandis to th Assessing O consequential 5. A

September 9, Ess Kay

Whether speak Whether Repor 024 (O&M) Page 3 of 3

he present case. Accordingly, no Officer u/s 148 dated 15.03 l proceedings are set aside. All pending applications also stan [SANJEEV , 2024 [SAN

king / reasoned :

Y rtable

Y otice issued by the Jurisdictional 3.2024 (Annexure P-1), and nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No l d Suresh Kumar 2024.09.10 09:36 I attest to the accuracy and integrity of this document

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