BANKEY BIHARI SPINNERS PRIVATE LIMITED THROUGH ITS DIRECTOR SH SUMIT GARG vs. INCOME TAX OFFICER WARD 1, PANIPAT AND OTHERS

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CWP/25513/2024HC Punjab & HaryanaPHHC01133097202403 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 held that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments must be followed strictly. Powers under Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), do not allow authorities to usurp legal provisions for their convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions for implementation. Therefore, notices issued by the JAO under Section 148 of the Act, 1961, and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, were found to be contrary to the provisions of the Act. Consequently, the notices dated February 28, 2023, March 16, 2023, March 20, 2023, March 30, 2023, and the notice dated August 31, 2024, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, if so advised. No issue was expressly left undecided.

What were the facts?

The petitioner, Bankey Bihar Spinners Private Limited, filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The respondents are the Income Tax Officer and another. The assessment year(s) are not explicitly stated but the notices are dated February 28, 2023, March 16, 2023, March 20, 2023, and March 30, 2023, with a notice under Section 148 dated August 31, 2024. The core of the dispute revolves around the validity of these notices and the assessment proceedings initiated without conducting a faceless assessment as envisaged under Section 144B of the Act. The High Court noted that similar issues had been decided by coordinate benches in other writ petitions.

What were the issues?

1. Whether notices issued 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 valid and in accordance with the provisions of the Act, 1961? (Mixed question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The petitioner implicitly argues that the proceedings are invalid due to the non-adherence to the faceless assessment procedure. The judgment does not explicitly record separate arguments for the petitioner beyond what is implied by the challenge. Revenue's Contention: The revenue, through its counsel, accepted notice and did not present distinct arguments against the petitioner's stance, instead agreeing that the issue was concluded by previous judgments of the court. The judgment does not record specific arguments made by the revenue.

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-25513-202

132

IN TH Bankey Bihar Income Tax O CORAM: H

H Present: M

SANJEEV P

1.

Notice 2. Mr. Sau respond 3. Both th petition No.215 decided No.157 and oth held as 24

Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

ri Spinners Private Limited Vs.

Officer and another **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Amit Kaushik, Advocate for Mr. Saurabh Kapoor,Sr. Standing for the respondents/Revenue. **** RAKASH SHARMA, J.(Oral) of motion. urabh Kapoor, Sr. Standing Cou dents/Revenue. he counsel are ad idem that the n stands finally examined and co 509 of 2023 titled as Jasjit Singh d on 29.07.2024, and by the 745 of 2024 titled as Jatinder Sin hers, decided on 19.07.2024. Th under:

AB AND HARYANA AT RH CWP-25513-2024 Date of Decision: 03.10.2024 . . . . Petitioner . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH r the petitioner. g Counsel ) unsel accepts notice on behalf of e issue involved in the present oncluded by this Court in CWP h vs. Union of India and others, e Coordinate Bench in CWP ngh Bhangu vs. Union of India his Court in Jasjit Singh (supra)

4 4

r s f t P , P a ) RASHMI 2024.10.03 16:49 I attest to the accuracy and integrity of this document

CWP-25513-202

b i o o i m S S a s a t a s i n s w C u i a A p d 3 f 24

Page 2 of 3 “16. We are in agreemen by the Coordinate Bench and hol nstructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen mplications are required to be mandatorily. By exercising the Sections 119 and 120 of the A Section 144B (7 & 8), the a allowed to usurp the legal pro satisfaction and convenience ca assessees. It also leaves confusio taxpayers. In the opinion of th and circulars can be issued on supplementing the statutory pro mplementation. 17. In view of the aforesa no occasion to distinguish or ta suggested by the learned counse what has already been held by th 18. Keeping in view the Coordinate Bench (supra), notic under Section 148 of the Act, 196 nitiated thereafter without con assessment as envisaged under Act, 1961, have been found to provisions of the Act, 1961 an dated 28.02.2023, 16.03.202 30.03.2023 and order dated 30. for want of jurisdiction.

nt with the view taken ld that such circular or not have been issued to to make them otiose or nts having financial followed strictly and powers contained in Act, 1961 as well as authorities cannot be ovisions to their own ausing hardship to the on in the minds of the his Court, instructions nly for the purpose of ovisions and for their aid discussion, there is ake a different view as el for the revenue from he Coordinate Bench. law laid down by the ces issued by the JAO 61 and the proceedings nducting the faceless r Section 144B of the o be contrary to the d accordingly notices 23, 20.03.2024 and 03.2023, are set aside

RASHMI 2024.10.03 16:49 I attest to the accuracy and integrity of this document

CWP-25513-202

a t i w 4. Keepin terms. mutand Jurisdic 31.08.2 5. All pen

October 03, 20 rashmi 1. Whethe 2. Whethe 24

Page 3 of 3 19. The respondents-reven at liberty to follow the procedur the Act, 1961 and proceed accord 20. All the writ petition nterim order passed by the Cou with the present order.”

ng in view above, we allow this The observations and order pa dis to the present case. Ac ctional Assessing Officer 2024(P-1) as well as the consequ nding applications also stand disp

(SANJ 024 r speaking/reasoned?

Y r reportable?

nue would be, however, re as laid down under dingly, if so advised. ns are allowed. The urt shall stand merged s Writ Petition in the aforesaid assed above shall apply mutatis ccordingly, notice issued by under Section 148 dated uential proceedings are set aside. posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d s y d RASHMI 2024.10.03 16:49 I attest to the accuracy and integrity of this document

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