AGGARWAL SALES vs. DEPUTY COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/25006/2024HC Punjab & HaryanaPHHC01128882202426 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 cannot override statutory provisions or render them obsolete. The powers contained in Sections 119, 120, and 144B(7 & 8) of the Act, 1961, cannot be used by authorities to usurp legal provisions for their convenience, causing hardship to assessees and confusion. Instructions and circulars can only supplement statutory provisions. 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 notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and an order dated 30.03.2023 for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure. The specific notice dated 31.08.2024 issued to the petitioner in this case and consequential proceedings were also set aside. The ratio is that faceless assessment, when mandated by statute, must be followed, and deviations without statutory backing are impermissible.

What were the facts?

The petitioner, Aggarwal Sal, filed a writ petition before the Punjab and Haryana High Court challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue was represented by the Deputy Commissioner of Income Tax and others. The core of the dispute revolved around the procedure followed for assessment, specifically whether faceless assessment as envisaged under Section 144B of the Act was conducted. The petitioner argued that the notices and proceedings were initiated without adhering to the mandatory faceless assessment procedure. The High Court noted that the issue was similar to previous cases decided by a Coordinate Bench.

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 faceless assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act, 1961? (Question of law and mixed fact and law, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The notices and proceedings are invalid because they were initiated without conducting the mandatory faceless assessment as required by Section 144B of the Act. The authorities cannot override statutory provisions or make them obsolete through circulars or instructions. Revenue's Contention: The revenue suggested that there might be grounds to distinguish the present case from previous decisions of the Coordinate Bench. However, the judgment does not explicitly detail the revenue's specific arguments beyond this suggestion.

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

154

I Aggarwal Sal

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 m f IN THE HIGH COURT OF PUN AT CHANDIGA C D les

Vs. missioner of Income Tax and oth

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Nikhil Goyal, 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 make them otiose or obsolete. financial implications are requi NJAB AND HARYANA ARH CWP-25006-2024 (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 Legislative enactments having ired to be followed strictly and n l d f n a s e d

g 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- 25006-2024 (O&M)

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.”

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- 25006-2024 (O&M)

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 31.08.2024 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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