MONGA RICE MILLS vs. UNION OF INDIA AND OTHERS

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CWP/22850/2024HC Punjab & HaryanaPHHC01120686202409 September 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

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 thereafter, without conducting faceless assessments as envisaged under Section 144B of the Act, were found to be 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 administrative instructions or circulars cannot override statutory provisions or make them otiose, and legislative enactments with financial implications must be followed strictly. The Court found that the authorities could not usurp legal provisions for their own satisfaction or convenience, causing hardship and confusion to assessees. Therefore, the notices dated 31.08.2024 (Annexure P-5), and other consequential orders were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act and proceed accordingly, if so advised. All pending applications were also disposed of.

What were the facts?

The petitioner, Monga Rice Mills, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and consequential assessment orders. The petitioner argued that these notices and proceedings were initiated without adhering to the faceless assessment scheme mandated by Section 144B of the Act. 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 citing Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. These prior judgments had held that administrative instructions or circulars could not override statutory provisions or render them obsolete, and that legislative enactments with financial implications must be followed strictly.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated without conducting faceless assessments as envisaged under Section 144B of the Act, are valid and have jurisdiction. Assessee's Contention: The assessee contended that the notices and consequential proceedings were invalid because they were not conducted through the faceless assessment mechanism prescribed by Section 144B, thereby violating the statutory mandate. The assessee relied on the principle that administrative instructions cannot override statutory provisions. Revenue's Contention: The revenue, through its Senior Standing Counsel, accepted notice and did not present any arguments against the assessee's position. The judgment notes that the counsel for the revenue was 'ad idem' with the petitioner's counsel, indicating agreement with the assessee's stance.

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

153 IN TH MONGA RICE

UNION OF IN

CORAM: H

Present: M M f

M f

* SANJEEV PR

1.

N 2. M behalf of the r 3. B present petitio No.21509 of decided on 29 2024 titled a decided on 19

C i o o i m HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of CE MILLS

V NDIA AND OTHERS

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. Sanjay Bansal, Senior Advoc Mr. Gurdeep Singh and Mr. Udit for the petitioner. Mr. Yogesh Putney, Senior Stand for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Yogesh Putney, Senior Stan respondent-Income Tax Departm Both the counsel are ad idem on stands finally examined and c f 2023 titled as Jasjit Singh vs 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 mandatorily. By exercising the AB AND HARYANA AT RH 22850-2024 (O&M) f Decision:09.09.2024

..…...Petitioners (s) V/s.

......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH cate, assisted by t Jain, Advocates ding Counsel, Department nding Counsel, accepts notice on ment that the issue involved in the concluded by this Court in CWP s. 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 powers contained in n e P , f , Suresh Kumar 2024.09.10 15:03 I attest to the accuracy and integrity of this document

CWP-22850-202

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

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 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 15:03 I attest to the accuracy and integrity of this document

CWP-22850-202

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 31.08 l proceedings are set aside. All pending applications also stan [SANJEEV , 2024 [SAN

king / reasoned :

Y rtable

Y 8.2024 (Annexure P-5), and nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No d Suresh Kumar 2024.09.10 15:03 I attest to the accuracy and integrity of this document

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