DIVKARAN SINGH vs. INCOME TAX OFFICER AND OTHERS

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CWP/26100/2024HC Punjab & HaryanaPHHC01132992202404 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE ALOK JAIN3 pages
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What did the High Court hold?

The High Court held that notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, were contrary to the provisions of the Act and accordingly set aside. The Court relied on its previous decisions in Jasjit Singh vs. Union of India and others and Jatinder Singh Bhangu vs. Union of India and others. The reasoning was that circulars or instructions issued by the Board could not override statutory provisions or make them otiose. Legislative enactments with financial implications must be followed strictly. The Court found that by exercising powers under Sections 119 and 120, as well as Section 144B(7 & 8), authorities cannot usurp legal provisions for their convenience, causing hardship and confusion. Instructions and circulars can only supplement statutory provisions. Consequently, the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and the order dated 30.03.2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act. The specific notice dated 05.04.2022 issued to the petitioner and consequential proceedings were also set aside. The operative direction was to allow the writ petition and set aside the impugned notices and proceedings.

What were the facts?

The petitioner, Divkaran Singh, 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, represented by the Income Tax Officer & Ors., accepted notice. The core of the dispute revolved around whether faceless assessment procedures, as envisaged under Section 144B of the Act, were followed. The petitioner argued that the notices and proceedings were initiated without adhering to the mandatory faceless assessment regime. The High Court noted that the issue was identical to those decided in previous writ petitions, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) and CWP No. 1574 of 2024 (Jatinder Singh Bhangu vs. Union of India and others).

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 valid and in accordance with law? (Question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued that the notices and proceedings were contrary to the provisions of the Act, specifically the mandatory faceless assessment procedure under Section 144B, and therefore lacked jurisdiction. Revenue's Contention: The revenue, through its counsel, accepted notice and did not present any distinct arguments against the assessee's position. The judgment notes that the parties were 'ad idem' that the substantial issue had been finally examined and concluded in prior judgments. The revenue did not suggest any reason to distinguish the present case from the precedents.

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

170

I Divkaran Sing

Income Tax O

CORAM: H

Present M 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 gh

Vs. Officer & Ors.

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE ALO Mr. B.M. Monga, Advocate and Mr. Rohit Kaura, Advocate for th ***

RAKASH SHARMA, J.(Oral) Notice of motion. Mr. Yogesh Putney, Sr. Standi 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-26100-2024 (O&M) Date of Decision: 04.10.2024

…Petitioner

…Respondents NJEEV PRAKASH SHARMA OK JAIN

he petitioner. ) ing 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 2024.10.14 11:17 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP-26100-2024 (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 2024.10.14 11:17 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP-26100-2024 (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 05.04.2022 and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(ALOK JAIN)

JUDGE 04.10.2024 rajesh

1.

Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No RAJESH KUMAR 2024.10.14 11:17 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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