SIKA INDIA PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX-CIRCLE 3(1), GURGAON AND OTHERS

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CWP/26952/2023HC Punjab & HaryanaPHHC01151975202330 July 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that instructions and circulars issued by the CBDT cannot override statutory provisions or make them otiose. Legislative enactments having financial implications must be followed strictly and mandatorily. The Court agreed with the view of a coordinate bench that authorities cannot usurp legal provisions for their satisfaction and convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions and aid in their implementation. 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 provisions of the Income Tax Act, 1961. The impugned notices and orders were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure under the Act if so advised. No issue was expressly left undecided.

What were the facts?

The petitioner, Sika India Pvt. Ltd., challenged notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The High Court of Punjab and Haryana was considering a batch of writ petitions, with CWP-21509-2023 (Jasjit Singh Vs. Union of India and Others) being the lead case. In the lead case, the Court had already held that notices issued by the JAO were unjustified. The present writ petition, CWP-26952-2023, was being decided in light of that precedent. The impugned notices and orders were dated 28.02.2023, 16.03.2023, 20.03.2024, 30.03.2023, and 08.02.2023, 27.03.2023, and 31.03.2023.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings are valid when faceless assessment, as envisaged under Section 144B of the Act, was not conducted? Assessee's Contention: The assessee argued, relying on a coordinate bench's decision in Jasjit Singh Vs. Union of India and Others, that notices issued by the JAO were unjustified. The core of this argument was that instructions and circulars issued by the Board cannot override statutory provisions or render them obsolete, and that legislative enactments with financial implications must be strictly followed. The assessee contended that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion, and that instructions/circulars can only supplement statutory provisions. Revenue's Contention: The revenue suggested a distinction or a different view from the coordinate bench's ruling. The judgment does not explicitly detail the revenue's specific arguments beyond this general statement.

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

271 I SIKA India P Assistant Com CORAM: H

Present M

SANJEEV P 1. L raised in this dated 29.07.2 CWP-21509-2 wherein this C Officer as unj 2. T “1 1 1 C th p e fo c IN THE HIGH COURT OF PUN AT CHANDIGA C D vt. Ltd.

Vs. mmissioner of Income Tax and o

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Umang Goyal, Advocate for Mr. Varun Issar, Sr. Standing Co

***

RAKASH SHARMA, J.(Oral) Learned counsel for both the si writ petition stands finally adju 024 passed in a bunch of writ pe 2023 titled as Jasjit Singh Vs Court has held the notice issued ustified. The Court has passed the followi 14 xxx xxx xxx xxx 15 xxx xxx xxx xxxx 16. We are in agreement wi Coordinate Bench and hold that su he Board could not have been provisions or to make them otio enactments having financial impl followed strictly and mandatorily contained in Sections 119 and 120 NJAB AND HARYANA ARH CWP-26952-2023 (O&M) Date of Decision: 30.07.2024

…Petitioner others …Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH r the petitioner. ounsel for the respondents.

) ides are ad idem that the issue dicated by this Court vide order etitions in which the lead case is s. Union of India and Others, d by the Jurisdictional Assessing ing order:- ith the view taken by the uch circular or instructions by issued to override statutory ose or obsolete. Legislative lications are required to be y. By exercising the powers 0 of the Act, 1961 as well as e r s , g RAJESH KUMAR 2024.08.02 09:37 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP-26952-2023 (O&M)

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. 21. xxx xxx xxxx 22. xxx xxx xxxx”

3.

In view of the above, we allow the writ petition in the aforesaid terms and set aside the impugned notice/order dated 08.02.2023, 27.03.2023 RAJESH KUMAR 2024.08.02 09:37 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP-26952-2023 (O&M)

and 31.03.2023. The observations and order passed above shall apply mu- tatis mutandis to the present case. 4. 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. 5. Pending applications, if any, shall stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 30.07.2024 rajesh

1.

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

: Yes/No RAJESH KUMAR 2024.08.02 09:37 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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