GGB ROYAL DEVELOPERS PVT LTD vs. UNION OF INDIA AND OTHERS

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CWP/23852/2024HC Punjab & HaryanaPHHC01126147202418 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 assessment proceedings initiated without conducting the mandatory faceless assessment as envisaged under Section 144B of the Act, were contrary to the provisions of the Act. The Court agreed with the view taken by a Coordinate Bench, holding that circulars or instructions issued by the Board cannot override statutory provisions or be issued to make them otiose. Legislative enactments with financial implications must be followed strictly. The Court found that the notices issued by the Jurisdictional Assessing Officer under Section 148, dated 05.04.2024 and 06.04.2024, along with earlier notices and consequential proceedings, were liable to be set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act, if so advised. The interim orders were to stand merged with the present order.

What were the facts?

The petitioners, Ess Kay Royal Developers Pvt. Ltd., challenged notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated for assessment years not explicitly stated but implied to be prior to the faceless assessment regime. The notices were dated 05.04.2024 and 06.04.2024, with further notices dated 28.02.2023, 16.03.2023, 20.03.2023, and 30.03.2023. The core of the challenge was that these proceedings were initiated without conducting the mandatory faceless assessment as envisaged under Section 144B of the Act. The revenue, represented by the Income Tax Department, accepted notice. The matter was heard by the High Court of Punjab and Haryana at Chandigarh.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated without conducting faceless assessment under Section 144B are valid, turning on the interpretation of Sections 119, 120, and 144B of the Act. Assessee's Contention: The assessee argued that the notices and subsequent proceedings were invalid because they were initiated without adhering to the mandatory faceless assessment procedure prescribed under Section 144B of the Act. They contended that administrative instructions or circulars cannot override statutory provisions and that legislative enactments with financial implications must be followed strictly. The assessee relied on the High Court's own previous decisions in similar matters. Revenue's Contention: The revenue, through its senior standing counsel, accepted notice. The judgment does not record specific arguments made by the revenue against the assessee's contentions or in support of the validity of the notices.

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

137

IN TH GGB ROYAL

UNION OF IN

CORAM: H

Present: M

* SANJEEV PR

1.

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

C i o o i m HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of DEVELOPERS PVT. LTD. V NDIA AND OTHERS

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ

Mr. Ayush Sarna, Advocate for t Mr. Ranvijay Singh, Senior Stand for the respondent. ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Ranvijay Singh, Senior Stan respondents/Income Tax Departm 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 override statutory provisions or t obsolete. Legislative enactmen implications are required to be mandatorily. By exercising the AB AND HARYANA AT RH 23852-2024 (O&M) f Decision:18.09.2024

..…...Petitioners (s) V/s. …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH the petitioner. ding Counsel, nding Counsel, accepts notice on ment. 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 to make them otiose or nts having financial e followed strictly and powers contained in n e P , f , Suresh Kumar 2024.09.23 11:02 I attest to the accuracy and integrity of this document

CWP-23852-202

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 024 (O&M) Page 2 of 3

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 the present case. Accordin

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 ngly, notices issued by the e s e Suresh Kumar 2024.09.23 11:02 I attest to the accuracy and integrity of this document

CWP-23852-202

Jurisdictional (Annexure P- 5. A

September 18 Ess Kay

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

Assessing Officer u/s 148 dat 3 and P-6), and consequential pr All pending applications also stan [SANJEEV 8, 2024 [SAN

king / reasoned :

Y rtable

ted 05.04.2024 and 06.04.2024 roceedings are set aside. nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No 4 Suresh Kumar 2024.09.23 11:02 I attest to the accuracy and integrity of this document

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