MANISH KUMAR SEHGAL vs. UNION OF INDIA AND OTHERS

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CWP/22822/2024HC Punjab & HaryanaPHHC01120235202409 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 held that notices issued under Section 148 of the Income Tax Act, 1961, and the consequential proceedings initiated without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, were found to be contrary to the provisions of the Act. The Court relied on its previous decisions in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra). The reasoning was that instructions by the Board could not override statutory provisions or make them obsolete, and legislative enactments with financial implications must be followed strictly. The Court reiterated that authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion. Therefore, the notices dated 09.04.2024 (Annexure P-1), 28.02.2023, 16.03.2023, 20.03.2023, 30.03.2023, and 30.03.2024, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, if so advised. The operative direction was to allow the writ petition and set aside the impugned notices and consequential proceedings.

What were the facts?

The petitioners, represented by Sh. Manish Kumar Sehgal, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Assessing Officer under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue, represented by the Union of India through the Ministry of Finance and the Income Tax Department, accepted notice. The High Court noted that similar issues had been decided by a Coordinate Bench in previous writ petitions, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India) decided on 29.07.2024, and CWP No. 15745 of 2023 (Jatinder Singh Bhangu vs. Union of India) decided on 19.07.2024. The present petition was filed in the same vein, seeking relief based on the precedent set in those cases.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, are valid and in accordance with the provisions of the Act, 1961? The assessee argued that the notices issued under Section 148 and subsequent proceedings were contrary to the provisions of the Act, 1961, particularly concerning the mandatory faceless assessment procedure under Section 144B. The assessee relied on the decisions of Coordinate Benches in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra). The revenue, through its Senior Standing Counsel, accepted notice and did not present any contrary arguments, implicitly agreeing with the submissions made by the assessee and the precedent set by the Coordinate Benches. The judgment notes that both counsel were 'ad idem' regarding the issue.

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

138 IN TH SH. MANISH

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 i HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of H KUMAR SEHGAL

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 implications are required to be AB AND HARYANA AT RH 22822-2024 (O&M) f Decision:09.09.2024

..…...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 e followed strictly and X

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

CWP-22822-202

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 mutandis to th 024 (O&M) Page 2 of 3

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 he present case. Accordingly, no 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 otice issued by the Jurisdictional e s l Suresh Kumar 2024.09.10 09:36 I attest to the accuracy and integrity of this document

CWP-22822-202

Assessing O consequential 5. A

September 9, Ess Kay

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

Officer u/s 148 dated 09.04 l proceedings are set aside. All pending applications also stan [SANJEEV , 2024 [SAN

king / reasoned :

Y rtable

Y 4.2024 (Annexure P-1), and nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

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

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