SAVITA MITTAL vs. ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/25277/2024HC Punjab & HaryanaPHHC01132604202414 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court, following its own prior decisions in Jasjit Singh vs. Union of India and others and a Coordinate Bench's decision in Jatinder Singh Bhangu vs. Union of India and others, held that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be strictly followed. The Court found that authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Instructions and circulars can only supplement statutory provisions. Consequently, notices issued by the JAO under Section 148 and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B were found to be contrary to the Act. The Court set aside the notice dated March 29, 2024, and consequential proceedings for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The ratio decidendi is that faceless assessment procedures mandated by statute must be followed, and deviations without proper legal basis render subsequent actions void.

What were the facts?

The petitioner, Savita Mittal, challenged a notice issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, dated March 29, 2024, and consequential proceedings. The petitioner and the revenue agreed that the issue was covered by previous judgments of the High Court of Punjab and Haryana. Specifically, they referred to 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 revolved around the procedure followed for assessment, particularly the non-application of faceless assessment as 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 initiated without conducting faceless assessment as per Section 144B of the Act, are contrary to the provisions of the Act and liable to be set aside. (Question of law and mixed fact and law, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued that the proceedings were vitiated because faceless assessment, as mandated by Section 144B, was not conducted. The notices and subsequent actions were therefore without jurisdiction. Revenue's Contention: The revenue, through Sr. Standing Counsel, accepted notice and did not present any arguments against the petitioner's claim, implicitly agreeing that the matter was concluded by prior judgments.

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-25277-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 114 CWP-25277-2024

Decided on : 14.10.2024 Savita Mittal . . . Petitioner(s) Versus Assistant Commissioner of Income Tax and Ors. . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Vishav Bharti Gupta, Advocate for the petitioner(s). Mr. Ranvijay Singh, Sr. Standing Counsel for the respondents – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Mr. Ranvijay Singh, 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 2024.10.16 17:03 I attest to the accuracy and authenticity of this document

CWP-25277-2024 - 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 2024.10.16 17:03 I attest to the accuracy and authenticity of this document

CWP-25277-2024 - 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 29.03.2024, and consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE October 14, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.10.16 17:03 I attest to the accuracy and authenticity of this document

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