SHASHI JAIN vs. INCOME TAX OFFICER AND OTHERS

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CWP/22855/2024HC Punjab & HaryanaPHHC01120246202409 September 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The Tribunal held that notices issued under Section 148 of the Income Tax Act, 1961, and the consequential proceedings initiated thereafter under Section 144B, without conducting the assessment in a faceless manner as envisaged by the Act, were found to be contrary to the provisions of the Act. The Tribunal relied on the law laid down by a Coordinate Bench in Jasjit Singh vs. Union of India and others, which held that instructions by the Board (CBDT circulars) could not override statutory provisions or be issued to make them otiose. The Court emphasized that legislative enactments with financial implications must be followed strictly and mandatorily. The Tribunal observed that authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. Therefore, the notices dated 31.03.2023, 28.02.2023, 16.03.2023, 20.03.2024, 30.03.2023, and 30.03.2023, along with consequential proceedings, 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 advised. All pending applications were also disposed of.

What were the facts?

The petitioners, represented by Mr. B.M. Monga and Mr. Rohit Kaura, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B. The respondent-Income Tax Department, represented by Mr. Saurabh Kapoor and Ms. Muskaan Gupta, accepted notice. The core issue revolved around the validity of these notices and proceedings, particularly in light of faceless assessment procedures. The petitioners argued that the notices and subsequent actions were contrary to the Act and established procedures. The judgment refers to prior decisions by coordinate benches in similar matters, 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), which dealt with the interpretation of CBDT circulars and statutory provisions.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated under Section 144B, are valid when they are found to be contrary to the provisions of the Act and established procedures, particularly concerning faceless assessments? (Question of law and mixed fact and law, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contentions: The petitioners argued that the notices and subsequent proceedings were invalid as they were contrary to the provisions of the Income Tax Act, 1961, and the established procedures for faceless assessments. They relied on the principles laid down in previous judgments by coordinate benches of the High Court. Revenue's Contentions: The revenue did not present any specific arguments against the petitioners' claims, as the counsel accepted that the issue had been finally examined and concluded by the High Court in prior similar cases.

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

156 IN TH SHASHI JAIN

INCOME TA BHAWAN, SE

CORAM: H

Present: M M

M M f

* SANJEEV PR

1.

N 2. M on behalf of th 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 N

V AX OFFICER, WARD-5, YA ECTOR 17, JAGADHARI, HARY HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. B.M. Monga, Advocate, and Mr. Rohit Kaura, Advocate for th Mr. Saurabh Kapoor, Senior Stan Ms. Muskaan Gupta, Advocate for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Saurabh Kapoor, Senior St he respondent-Income Tax Depa 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 22855-2024 (O&M) f Decision:09.09.2024

..…...Petitioners (s) V/s. YAMUNA NAGAR, AAYAKAR YANA AND OTHERS

......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH d he petitioner. nding Counsel, with Department tanding Counsel, accepts notice artment 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 R ) e e n , f , Suresh Kumar 2024.09.10 09:36 I attest to the accuracy and integrity of this document

CWP-22855-202

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-22855-202

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

king / reasoned :

Y rtable

Y 3.2024 (Annexure P-2), 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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