KRISHAN KUMAR AND SONS HUF vs. CHIEF COMMISSIONER OF INCOME TAX AMRITSAR 1 AND ANOTHER

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CWP/23399/2024HC Punjab & HaryanaPHHC01123599202413 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 subsequent proceedings initiated under the faceless assessment scheme (Section 144B) were contrary to the provisions of the Act and the principles laid down by the Coordinate Bench in previous judgments. The Court agreed with the Coordinate Bench's view that administrative instructions or circulars cannot override statutory provisions or render them otiose. It was emphasized that legislative enactments having financial implications must be followed strictly. The Court found that the authorities, by exercising powers under Sections 119 and 120, as well as Section 144B, could not usurp legal provisions for their convenience, causing hardship and confusion to assessees. Consequently, the notices dated 28.02.2023, 20.03.2023, 16.03.2023, 30.03.2023, and 30.03.2023, along with the consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, if so advised. The Court also noted that the observations and order passed in the cited cases would apply mutatis mutandis to the present case. The notice issued by the Jurisdictional Assessing Officer u/s 148 dated 28.08.2024 was also set aside.

What were the facts?

The petitioner, Krishan Kumar and Sons, filed a writ petition challenging a notice issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The assessment year(s) are not explicitly stated but implied to be related to reassessment proceedings. The respondent is the Commissioner of Income Tax, Amritsar-1. The procedural history involves the issuance of a notice under Section 148 and the initiation of reassessment proceedings. The petitioner argued that these proceedings were initiated without jurisdiction. The High Court considered previous judgments on similar matters, including CWP No. 21509 of 2023 and CWP No. 15745 of 2023, which dealt with the validity of faceless assessment procedures and the overriding effect of statutory provisions over administrative instructions. The amount in dispute is not specified.

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, as envisaged by Section 144B of the Act, are valid when they are found to be contrary to the provisions of the Act and the principles laid down by the High Court in previous judgments. Assessee's Contention: The petitioner contended that the notice under Section 148 and the consequential proceedings were initiated without jurisdiction, implying a procedural or substantive defect. They relied on the principle that administrative instructions cannot override statutory provisions and that faceless assessment procedures, if not implemented correctly, can lead to invalidity. Revenue's Contention: The revenue, represented by the Senior Standing Counsel, accepted notice and did not present a distinct argument against the petitioner's claim, as the counsel were 'ad idem' that the issue was concluded by previous judgments. They did not rely on any specific authorities or circulars to support their position against the petitioner's challenge.

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

115 IN TH KRISHAN KU

CHIEF COM BHAWAN, PU

CORAM: H

Present: M M f

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 HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of UMAR AND SONS

V MMISSIONER OF INCOME UNJAB AND ANOTHER HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. Aalok Mittal, Advocate with Mr. Yugank Goyal and Mr. Anki for the petitioner. Ms. Urvashi Dhugga, Senior Stan Ms. Samdesha Kaur, Advocate for the respondent/Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Ms. Urvashi Dhugga, 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 AB AND HARYANA AT RH 23399-2024 (O&M) f Decision:13.09.2024

..…...Petitioners (s) V/s. TAX, AMRITSAR-1, AYAKAR

......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH h it Goyal, Advocates, 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 R ) e e n , f , Suresh Kumar 2024.09.13 17:53 I attest to the accuracy and integrity of this document

CWP-23399-20

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

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.” 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 2024.09.13 17:53 I attest to the accuracy and integrity of this document

CWP-23399-20

4.

K aforesaid term mutandis to th Assessing Of are set aside. 5. A

September 13 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 he present case. Accordingly, no fficer u/s 148 dated 28.08.2024 All pending applications also stan [SANJEEV 3, 2024 [SAN

king / reasoned :

Y rtable

Y allow this Writ Petition in the passed above shall apply mutatis otice issued by the Jurisdictional and consequential proceedings nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No e s l s Suresh Kumar 2024.09.13 17:53 I attest to the accuracy and integrity of this document

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