ISHWAR CHAND vs. UNION OF INDIA AND OTHERS

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CWP/23116/2024HC Punjab & HaryanaPHHC01122170202411 September 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The Tribunal held that instructions by the Board, while useful for supplementing statutory provisions and for their implementation, cannot override statutory provisions or make them otiose. Legislative enactments having financial implications must be followed strictly. Authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. The Court agreed with the view taken by a coordinate bench that circulars or instructions cannot override statutory provisions. Consequently, notices issued by the Assessing Officer under Section 148 of the Income Tax Act, 1961, and the consequential proceedings initiated thereafter, without conducting the assessment as envisaged under Section 144B, were found to be contrary to the provisions of the Act, 1961, and were set aside for want of jurisdiction. The Revenue was granted liberty to follow the procedure as laid down under the Act, 1961, and proceed accordingly if so advised. The writ petitions were allowed, and interim orders stood merged with the final order.

What were the facts?

The petitioners, identified as the assessee, challenged notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under the faceless assessment scheme. The assessment years are not explicitly stated but the notices are dated between February 28, 2023, and March 30, 2023, with one notice dated March 20, 2024, and another order dated August 1, 2024. The challenge is to the validity of these notices and proceedings. The procedural history involves the filing of writ petitions before the High Court of Punjab and Haryana. The Revenue, represented by the Income Tax Department, accepted notice. The Court noted that similar issues were decided in prior writ petitions, namely Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, decided on July 9, 2024.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under the faceless assessment scheme, without conducting the assessment as envisaged under Section 144B of the Act, are valid and in consonance with the statutory provisions of the Act, 1961. (Mixed question of law and fact, concerning Section 148 and Section 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued, through their counsel, that the notices and subsequent proceedings were contrary to the provisions of the Act, 1961, and were issued without jurisdiction. They relied on the decisions of coordinate benches in Jasjit Singh and Jatinder Singh Bhangu. Revenue's Contention: The Revenue, through its Senior Standing Counsel, accepted notice. No specific arguments were recorded for the Revenue in opposition to the assessee's contentions.

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

125 IN TH ISHWAR CHA

UNION OF IN DEPARTMEN OTHERS

CORAM: H

Present: M M f

M f

* SANJEEV PR

1.

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

C i HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of AND

V NDIA THROUGH ITS SECRETA NT OF REVENUE, NORTH HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ (Through Video Conferencin Mr. Sanjay Bansal, Senior Advoc Mr. Gurdeep Singh and Mr. Udit for the petitioner. Ms. Gauri Neo Rampal, Senior S for the respondents/Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Ms. Gauri Neo Rampal, Senior S he respondents/Income Tax Dep 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 AB AND HARYANA AT RH 23116-2024 (O&M) f Decision:11.09.2024 ..…...Petitioners (s) V/s. TARY, MINISTRY OF FINANCE, BLOCK, NEW DELHI AND …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH ng/Hybrid Mode) cate, assisted by t Jain, Advocates Standing Counsel, Department. Standing Counsel, accepts notice partment. 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

D ) e e P , f , Suresh Kumar 2024.09.11 16:48 I attest to the accuracy and integrity of this document

CWP-23116-202

o o 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 024 (O&M) Page 2 of 3

override statutory provisions or t obsolete. Legislative enactmen 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.” to make them otiose or nts having financial 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 Suresh Kumar 2024.09.11 16:48 I attest to the accuracy and integrity of this document

CWP-23116-202

4.

K aforesaid term mutandis to Jurisdictional 1961 dated 31 aside. 5. A

September 1 Ess Kay

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

Keeping in view above, we a ms. The observations and order p the present case. Accordin Assessing Officer under Sectio 1.08.2024 (Annexure P-3) and co All pending applications also stan [SANJEEV 1, 2024 [SAN

king / reasoned :

Y rtable

Y allow this Writ Petition in the passed above shall apply mutatis ngly, notices issued by the on 148 of the Income Tax Act, onsequential proceedings are set nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No e s e , t Suresh Kumar 2024.09.11 16:48 I attest to the accuracy and integrity of this document

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