GURMEET KHANDELWAL vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1 AND OTHERS

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CWP/23157/2025HC Punjab & HaryanaPHHC01117831202511 August 2025Bench: MR. JUSTICE DEEPAK SIBAL,MS. JUSTICE LAPITA BANERJI3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, following its own co-ordinate bench decisions in Jatinder Singh Bhangu's case and Jasjit Singh's case, allowed the writ petitions on the same issue. The court noted that Section 151A and the notification dated 29.03.2022 clearly indicate the applicability of the faceless assessment scheme from the stage of show cause notice under Section 148. The court emphasized that the object of faceless assessment would be defeated if the jurisdictional assessing officer issues the show cause notice. While circulars and instructions from the Board are generally binding on authorities, they cannot override statutory provisions. The court found the mandate of Section 144B, 151A read with the notification lucid and unambiguous. Consequently, the writ petition was disposed of with a direction to the Appellate Authority to decide the pending appeal in terms of the aforementioned judgments.

What were the facts?

The petitioner, Gurmeet Khandelwal, challenged a notice dated 13.03.2023 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2020-2021. The challenge was based on the ground that the issuing authority lacked jurisdiction due to a CBDT circular dated 29.03.2022, which purportedly grants exclusive power to the National Faceless Assessment Centre (NFAC) to issue such notices. The petitioner also mentioned that an appeal was pending before the Appellate Authority. The respondents, represented by the Deputy Commissioner of Income Tax and others, did not dispute the petitioner's contentions.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is invalid due to lack of jurisdiction by the issuing authority, considering the CBDT circular dated 29.03.2022 and the scheme of faceless assessment. Assessee's contentions: The petitioner argued that the issuing authority had no jurisdiction to issue the Section 148 notice, citing the CBDT circular dated 29.03.2022, which specifies that the National Faceless Assessment Centre (NFAC) has exclusive power to issue such notices. The petitioner relied on judgments from a Co-ordinate Bench of the High Court in Jatinder Singh Bhangu Vs. Union of India and others (CWP No.15745-2024, decided on 19.07.2024) and Jasjit Singh Vs. Union of India and others (CWP No.21509 of 2023, decided on 29.07.2024). Revenue's contentions: The respondents did not dispute the petitioner's contentions.

Which sections of the Income-tax Act were involved?

Section 148,Section 151A,Section 144B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Sr. No.150 CWP-23157-2025 Date of decision: 11.08.2025 Gurmeet Khandelwal ....Petitioner Versus Deputy Commissioner of Income Tax, Central Circle 1 and others ....Respondents CORAM: HON'BLE MR. JUSTICE DEEPAK SIBAL HON'BLE MS. JUSTICE LAPITA BANERJI Present: Mr. Puneet Aggarwal, Advocate, for the petitioner. Mr. Yogesh Putney, Sr. Standing Counsel Mr. Vaibhav Gupta, Jr. Standing Counsel Mr. Vidul Kapoor, Jr. Standing Counsel for the respondents. * * * DEEPAK SIBAL, J. (Oral) 1. Challenge in the present petition is to Notice dated 13.03.2023 issued under Section 148 of the Income Tax Act, 1961 (for short ‘Act 1961’) and all consequential proceedings for the Assessment year 2020- 2021, on the ground that Issuing Authority had no jurisdiction to issue the same, in view of circular/notification dated 29.03.2022 of the CBDT, wherein, it has been specifically enumerated that National Faceless Assessment Centre (NFAC) has exclusive power to issue notice under Section 148 of the Act, 1961. 2. Learned counsel for the petitioner contends that the issue involved in the present writ petition is covered by judgment passed by a Co- ordinate Bench of this Court in the cases of Jatinder Singh Bhangu Vs JYOTI SHARMA 2025.08.13 17:01 I attest to the accuracy and integrity of this document chandigarh

CWP-23157-2025 -2- Union of India and others, passed in CWP No.15745-2024 and connected matter, decided on 19.07.2024 and Jasjit Singh Vs. Union of India and others (CWP No.21509 of 2023 and other connected matters), decided on 29.07.2024. Learned counsel for the petitioner has further submitted that petitioner has preferred an appeal and same is pending before Appellate Authority. 3. Learned counsel appearing for the respondents has also not disputed the same. 4. We have heard learned counsel for the parties and perused the file with their able assistance. 5. A co-ordinate Bench of this Court in Jasjit Singh Bhangu’s case (supra) and Jasjit Singh's case (supra), allowed the writ petitions on the same issue, as raised in the present writ petition, by granting liberty to the revenue to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised. Relevant portion of decision dated 19.07.2024 in Jatinder Singh Bhagu’s case (supra) reads as under: “From the perusal of Section 151A, it is quite evident that scheme of faceless assessment is applicable from the stage of show cause notice under Section 148 as well as 148A. Clause 3 (b) of notification dated 29.03.2022 issued under Section 151A clearly provides that scheme would be applicable to notice under Section 148. Even otherwise, it is a settled proposition of law that assessment proceedings commence from the stage of issuance of show cause notice. The object of introduction of faceless assessment would be JYOTI SHARMA 2025.08.13 17:01 I attest to the accuracy and integrity of this document chandigarh

CWP-23157-2025 -3- defeated if show cause notice under Section 148 is issued by Jurisdictional Assessing Officer. The respondents are heavily placing reliance upon office memorandum and letter issued by departmental authorities. It is axiomatic intax jurisprudence that circulars, instructions and letters issued by Board or any other authority cannot override statutory provisions. The circulars are binding upon authorities and Courts are not bound by circulars. The mandate of Section 144B, 151A read with notification dated 29.03.2022 issued thereunder is quite lucid. There is no ambiguity in the language of statutory provisions, thus, office memorandum or any other instruction issued by Board or any other authority cannot be relied upon.” 6. As appeal in the present proceedings is pending before the Appellate Authority, this writ petition is disposed of with a direction to the Appellate Authority to decide the same in terms of Jatinder Singh Bhagu’s case (supra), decided on 19.07.2024 and Jasjit Singh's case (supra), decided on 29.07.2024. 7. All the pending applications, if any, also stand disposed of accordingly. (DEEPAK SIBAL) JUDGE (LAPITA BANERJI) JUDGE August 11, 2025 Jyoti 1 Whether speaking/reasoned Yes/No Whether reportable Yes/No JYOTI SHARMA 2025.08.13 17:01 I attest to the accuracy and integrity of this document chandigarh

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