SUSHIL BANSAL vs. ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/24230/2024HC Punjab & HaryanaPHHC01127619202420 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 circulars or instructions issued by the Board cannot override statutory provisions or render them otiose. Legislative enactments with financial implications must be followed strictly and mandatorily. Authorities cannot usurp legal provisions for their convenience, causing hardship to assessees, by exercising powers under Sections 119 and 120, as well as Section 144B(7 & 8) of the Act. Instructions and circulars are only for supplementing statutory provisions and their implementation. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessment under Section 144B were found to be contrary to the Act. The Court set aside the notices and consequential proceedings for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act if so advised. The writ petition was allowed in terms of the earlier judgments.

What were the facts?

The petitioner, Sushil Bansal, filed a writ petition before the High Court of Punjab and Haryana at Chandigarh challenging certain actions of the Assistant Commissioner of Income Tax and others. The revenue, represented by Ms. Urvashi Dhugga, Sr. Standing Counsel, accepted notice. Both parties agreed that the issue in the present petition had been decided by this Court in CWP No.21509 of 2023 (Jasjit Singh vs. Union of India and others) decided on 29.07.2024, and by a Coordinate Bench in CWP No.15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on 19.07.2024. The High Court was therefore asked to apply the principles laid down in those earlier judgments to the present case.

What were the issues?

1. Whether notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated without conducting a faceless assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act, 1961, and thus liable to be set aside for want of jurisdiction? Assessee's Contention: The assessee, by relying on the judgments in Jasjit Singh and Jatinder Singh Bhangu, would argue that the notices and proceedings are invalid as they bypass the mandatory faceless assessment procedure under Section 144B. The circulars or instructions issued by the Board cannot override statutory provisions, and any deviation causes hardship and confusion. Revenue's Contention: The revenue, as indicated by their counsel accepting notice and the reference to the earlier judgments, did not appear to press for a different view. The judgment notes that the revenue's counsel did not suggest a different view from what was already held by the Coordinate Bench.

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

CWP-24230-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 118 CWP-24230-2024

Decided on : 20.09.2024 Sushil Bansal . . . Petitioner(s) Versus Assistant Commissioner of Income Tax and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Nikhil Goyal, Advocate and Mr. Rana Gurtej Singh, Advocate for the petitioner(s). Ms. Urvashi Dhugga, Sr. Standing Counsel for the respondents – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Ms. Urvashi Dhugga, Sr. Standing Counsel, accepts notice for the respondents – revenue. 3. Both the counsel are ad idem that the issue involved in the present petition stands finally examined and concluded by this Court in CWP No.21509 of 2023 titled as Jasjit Singh vs. Union of India and others, decided on 29.07.2024, and by the Coordinate Bench in CWP No.15745 of 2024 titled as Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. This Court in Jasjit Singh (supra) held as under: “16. We are in agreement with the view taken by the Coordinate Bench and hold that such circular or instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having JAWALA RAM 2024.09.20 17:28 I attest to the accuracy and authenticity of this document

CWP-24230-2024 - 2 - financial implications are required to be followed strictly and mandatorily. By exercising the powers contained in Sections 119 and 120 of the Act, 1961 as well as Section 144B (7 & 8), the authorities cannot be allowed to usurp the legal provisions to their own satisfaction and convenience causing hardship to the assessees. It also leaves confusion in the minds of the taxpayers. In the opinion of this Court, instructions and circulars can be issued only for the purpose of supplementing the statutory provisions and for their implementation. 17. In view of the aforesaid discussion, there is no occasion to distinguish or take a different view as suggested by the learned counsel for the revenue from what has already been held by the Coordinate Bench. 18. Keeping in view the law laid down by the Coordinate Bench (supra), notices issued by the JAO under Section 148 of the Act, 1961 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, have been found to be contrary to the provisions of the Act, 1961 and accordingly notices dated 28.02.2023, 16.03.2023, 20.03.2024 and 30.03.2023 and order dated 30.03.2023, are set aside for want of jurisdiction. 19. The respondents-revenue would be, however, at liberty to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised. 20. All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.” JAWALA RAM 2024.09.20 17:28 I attest to the accuracy and authenticity of this document

CWP-24230-2024 - 3 - 4. Keeping in view above, we allow this Writ Petition in the aforesaid terms. The observations and order passed above shall apply mutatis mutandis to the present case. Accordingly, notice issued by the Jurisdictional Assessing Officer u/s 148 dated 31.08.2024, and consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE September 20, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.09.20 17:28 I attest to the accuracy and authenticity of this document

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