SHREE LAKSHMI TRADING CO vs. INCOME TAX OFFICER AND OTHERS

PDF · subscribers
CWP/23422/2024HC Punjab & HaryanaPHHC01123550202413 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 subsequent proceedings initiated under Section 144B, were contrary to the provisions of the Act and the principles of faceless assessment. The Court agreed with the view taken by a Coordinate Bench in similar cases, emphasizing that circulars or instructions by the Board cannot override statutory provisions or render them otiose. Legislative enactments with financial implications must be followed strictly and mandatorily. The Court found that the authorities cannot usurp legal provisions to their own satisfaction and convenience, causing hardship and confusion to assessees. Therefore, the notices dated February 28, 2023, March 16, 2023, March 20, 2023, March 30, 2023, and March 30, 2024, along with consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act and proceed accordingly if so advised. The interim orders stood merged with the final order.

What were the facts?

The petitioners, Shree Lakshmi Trading Co. and others, filed writ petitions challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated under Section 144B. The assessment years are not explicitly stated but the notices are dated between February 28, 2023, and March 30, 2024. The core issue revolves around the validity of these notices and proceedings, particularly in light of faceless assessment procedures. The revenue, represented by the Income Tax Officer, Ward 1, Malerkotla, Punjab, accepted notice. The High Court referred to prior judgments in similar cases, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India) and CWP No. 15745 of 2024 (Jatinder Singh Bhangu vs. Union of India), which dealt with the interplay between Board circulars and statutory provisions.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings under Section 144B, initiated without conducting the mandatory faceless assessment as envisaged by the Act, are valid and sustainable in law? Assessee's Contention: The assessee argued that the notices and subsequent proceedings were contrary to the provisions of the Act, 1961, and the principles of faceless assessment. They relied on the High Court's own previous decisions in Jasjit Singh and Jatinder Singh Bhangu, which held that circulars cannot override statutory provisions and that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion. The assessee contended that the faceless assessment mechanism, as mandated, was not followed. Revenue's Contention: The revenue, through the Senior Standing Counsel, accepted notice. The judgment does not record any specific arguments or contentions made by the revenue against the assessee's submissions or the prior judgments cited.

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

130 IN TH SHREE LAKS

INCOME TAX OTHERS

CORAM: H

Present: M

* SANJEEV PR

1.

N 2. M behalf of the r 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 SHMI TRADING CO.

V AX OFFICER, ITO WARD 1, M

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. B.M. Monga, Advocate and Mr. Rohit Kaur, Advocate for the Mr. Ranvijay Singh, Senior Stand for the respondent. ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Ranvijay Singh, Senior Stan respondent-Income Tax Departm 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 23422-2024 (O&M) f Decision:13.09.2024

..…...Petitioners (s) V/s. MALERKOTLA, PUNJAB AND

......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH

e petitioner. ding Counsel, nding Counsel, accepts notice on ment 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 D n e n , f , Suresh Kumar 2024.09.13 17:53 I attest to the accuracy and integrity of this document

CWP-23422-202

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

CWP-23422-202

Assessing O consequential 5. A

September 13 Ess Kay

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

Officer u/s 148 dated 30.03 l proceedings are set aside. All pending applications also stan [SANJEEV 3, 2024 [SAN

king / reasoned :

Y rtable

Y 3.2024 (Annexure P-1), and nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

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

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →