REETA BAMBHA vs. DEPUTY COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/24372/2024HC Punjab & HaryanaPHHC01128174202423 September 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, following its own previous decisions in Jasjit Singh vs. Union of India and others and Jatinder Singh Bhangu vs. Union of India and others. The Court held that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be followed strictly. The Court found that by exercising powers under Sections 119 and 120, and Section 144B (7 & 8) of the Act, authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Instructions and circulars can only supplement statutory provisions for implementation. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings, initiated without conducting faceless assessments as envisaged under Section 144B, were found to be contrary to the Act and set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The specific notices dated 30.03.2024 and consequential proceedings were set aside. No issue was expressly left undecided.

What were the facts?

The petitioner, Reeta Bambha, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The revenue, represented by the Deputy Commissioner of Income Tax and others, accepted notice. Both parties agreed that the issue in the present petition was identical to those decided by the High Court in previous cases, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) decided on July 29, 2024, and CWP No. 15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on July 19, 2024. The core of the dispute involved the validity of assessments conducted without following the faceless assessment procedure envisaged under Section 144B of the Act.

What were the issues?

1. Whether notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and subsequent proceedings are invalid if they bypass the faceless assessment procedure mandated by Section 144B of the Act? (Question of law and mixed fact and law, concerning Section 148 and Section 144B). Assessee's Contention: The assessee implicitly argues, by relying on previous judgments, that notices and proceedings initiated without adhering to the faceless assessment procedure under Section 144B are contrary to the Act and thus without jurisdiction. The reliance on Jasjit Singh (supra) and Jatinder Singh Bhangu (supra) indicates an argument that circulars or instructions cannot override statutory provisions, and that bypassing Section 144B causes hardship and confusion. Revenue's Contention: The revenue, through its counsel, acknowledged that the issue had been finally examined and concluded by this Court in previous writ petitions. This suggests an acceptance of the legal position established in those cases, rather than a distinct argument against the assessee's position in this specific instance.

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-24372-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 117 CWP-24372-2024

Decided on : 23.09.2024 Reeta Bambha . . . Petitioner(s) Versus Deputy Commissioner of Income Tax and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. B.M. Monga, Advocate and Mr. Rohit Kaura, Advocate for the petitioner(s). Ms. Urvashi Dhugga, Sr. Standing Counsel and Ms. Gauri Neo Rampal, Sr. Standing Counsel for the respondents – revenue (appearing through V.C.). **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Ms. Urvashi Dhugga, Sr. Standing Counsel and Ms. Gauri Neo Rampal, Sr. Standing Counsel, accept 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 JAWALA RAM 2024.09.23 19:31 I attest to the accuracy and authenticity of this document

CWP-24372-2024 - 2 - make them otiose or obsolete. Legislative enactments having 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 2024.09.23 19:31 I attest to the accuracy and authenticity of this document

CWP-24372-2024 - 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 30.03.2024, and consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE September 23, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.09.23 19:31 I attest to the accuracy and authenticity of this document

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