SUBASH CHANDER vs. DEPUTY COMMISSIOENR OF INCOME TAX, AND OTHERS

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CWP/25004/2024HC Punjab & HaryanaPHHC01131172202426 September 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that circulars or instructions issued by the Board under Sections 119 and 120 of the Income Tax Act, 1961, cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications are mandatory. The Court stated that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to taxpayers. Instructions and circulars are meant to supplement statutory provisions and aid in their implementation. Consequently, notices issued by the JAO under Section 148 of the Act and subsequent proceedings, initiated without conducting faceless assessment as envisaged under Section 144B of the Act, were found to be contrary to the Act. The specific notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, along with an order dated 30.03.2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The writ petition was allowed in terms of the previous judgments.

What were the facts?

This is a writ petition filed before the Punjab and Haryana High Court. The petitioner, Subash Chand, is challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The revenue is represented by the Deputy Commissioner of Income Tax and others. The Court notes that the issue involved in this petition is identical to that decided in previous writ petitions, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) decided on 29.07.2024, and CWP No. 1574 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on 19.07.2024. The Court had previously held that circulars or instructions from the Board could not override statutory provisions.

What were the issues?

1. Whether circulars or instructions issued by the Board under Sections 119 and 120 of the Income Tax Act, 1961, can override statutory provisions or make them otiose, particularly in the context of faceless assessment under Section 144B of the Act. Assessee's Contention: The petitioner relies on the decisions in Jasjit Singh and Jatinder Singh Bhangu, where the Coordinate Bench held that circulars and instructions cannot override statutory provisions and that legislative enactments with financial implications must be strictly followed. The petitioner implicitly argues that the notices and proceedings initiated without following the faceless assessment procedure are invalid. Revenue's Contention: The revenue, through its learned counsel, suggested that there might be grounds to distinguish the present case from the previously decided ones. However, the Court found no occasion to take a different view.

Which sections of the Income-tax Act were involved?

Section 119,Section 120,Section 144B,Section 148

AI-generated summary — verify with the full judgment below

152

I Subash Chand

Deputy Comm

CORAM: H

Present M

SANJEEV P 1.

N 2.

M behalf of the r 3.

L issue involved by this Court India and oth CWP No.1574 and others, de under: “ B c IN THE HIGH COURT OF PUN AT CHANDIGA C D der

Vs. missioner of Income Tax and oth

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. B.M. Monga, Advocate for t ***

RAKASH SHARMA, J.(Oral) Notice of motion. Ms. Urvashi Dhugga, Sr. Stand revenue. Learned counsel for the parties d in the present petition stands f in CWP No.21509 of 2023 title hers, decided on 29.07.2024, an 745 of 2024 titled as Jatinder Sin ecided on 19.07.2024. This Cour “16. We are in agreement with th Bench and hold that such circul could not have been issued to ove NJAB AND HARYANA ARH CWP-25004-2024 (O&M) Date of Decision: 26.09.2024

…Petitioner hers …Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH the petitioner.

) ding Counsel, accepts notice on are ad idem that the substantial finally examined and concluded ed as Jasjit Singh vs. Union of nd by the Coordinate Bench in ngh Bhangu vs. Union of India rt in Jasjit Singh (supra) held as he view taken by the Coordinate lar or instructions by the Board erride statutory provisions or to n l d f n a s e d

RAJESH KUMAR 2024.09.27 12:09 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP- 25004-2024 (O&M)

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. RAJESH KUMAR 2024.09.27 12:09 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP- 25004-2024 (O&M)

20.

All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.”

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 under Section 148 of the Income Tax Act, dated 30.03.2024 and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 26.09.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No

RAJESH KUMAR 2024.09.27 12:09 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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