DHEERAJ GUPTA AND SONS HUF THROUGH ITS KARTA SH DHEERAJ KUMAR GUPTA vs. INCOME TAX OFFICER

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CWP/25702/2024HC Punjab & HaryanaPHHC01134367202403 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 the notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and the consequential proceedings initiated thereafter without conducting a faceless assessment as envisaged under Section 144B of the Act, were contrary to the provisions of the Act, 1961. The Court agreed with the view taken by the Coordinate Bench in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra). The reasoning was that instructions by the Board cannot override statutory provisions or make them otiose. Legislative enactments having financial implications must be followed strictly and mandatorily. By exercising powers under Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), the authorities cannot be allowed to usurp legal provisions to their own satisfaction and convenience, causing hardship and confusion to assessees. The Court found that such instructions and circulars can only supplement statutory provisions and aid their implementation. Consequently, the notices dated 28.02.2023, 16.03.2023, 20.03.2024, 30.03.2023, and the notice dated 31.08.2024 (P-1) were set aside for want of jurisdiction. The Revenue was at liberty to follow the procedure as laid down under the Act and proceed accordingly, if so advised. All pending applications were also disposed of.

What were the facts?

The petitioner, Dheeraj Gupta and Sons HUF, is challenging certain notices and proceedings initiated by the Income Tax Officer. The Revenue, represented by Mr. Saurabh Kapoor, Sr. Standing Counsel, accepted notice. Both parties agreed that the issue in the present writ petition has been finally examined and concluded by the High Court in two previous cases: CWP No. 509 of 2023 (Jasjit Singh vs. Union of India and others, decided on 29.07.2024) and CWP No. 157 of 2024 (Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024). The present petition concerns notices issued under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings initiated without conducting a proper assessment as envisaged under Section 144B of the Act. The specific notices under challenge are dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, as well as a notice dated 31.08.2024.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings initiated under Section 144B of the Act are liable to be set aside for want of jurisdiction, considering they are contrary to the provisions of the Act and the principles laid down by the High Court in previous judgments. Assessee's Contention: The assessee, through its counsel Mr. Amit Kaushik, argued that the notices and proceedings are invalid. The judgment indicates that the assessee's case is covered by the High Court's prior decisions in Jasjit Singh and Jatinder Singh Bhangu. Revenue's Contention: The Revenue, represented by Mr. Saurabh Kapoor, Sr. Standing Counsel, did not present any distinct arguments against the assessee's position, as both counsel were ad idem that the issue had been concluded by prior judgments of the Court. The judgment notes that the learned counsel for the revenue suggested no occasion to distinguish or take a different view from what was already held by the Coordinate Bench.

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- 25702-2

135

IN TH Dheeraj Gupt 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 024

Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

a and sons HUF 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-25702-2024 Date of Decision: 03.10.2024 . . . . Petitioner . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH 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)

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

CWP- 25702-2

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 024

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- 25702-2

a t i w 4. Keepin terms. mutand Jurisdic (P-1) as 5. All pen

October 03, 20 rashmi 1. Whethe 2. Whethe 024

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 under s well as the consequential proce 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 r Section 148 dated 31.08.2024 eedings are set aside. posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d s y 4 RASHMI 2024.10.03 16:49 I attest to the accuracy and integrity of this document

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