SHRI KRISHNA POULTRY FARM vs. UNION OF INDIA AND OTHERS

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CWP/27601/2024HC Punjab & HaryanaPHHC01138985202415 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 circulars or instructions issued by the Board under Sections 119 and 120 of the Income Tax Act, 1961, cannot override statutory provisions or make them otiose. Legislative enactments with financial implications must be followed strictly and mandatorily. The court found that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to taxpayers. Instructions and circulars can only supplement statutory provisions and aid in their implementation. Applying this principle and the law laid down in the cited judgments (Jasjit Singh and Jatinder Singh Bhangu), the court found that notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessments as envisaged under Section 144B were contrary to the Act. Consequently, the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, along with the order dated 30.03.2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The specific notice dated 01.03.2024 issued to the petitioner and consequential proceedings were also set aside.

What were the facts?

The petitioner, Shri Krishna Poultry Farm, 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 accepted notice. The parties agreed that the issue was similar to cases previously decided by the same court. Specifically, the court referred to its decision in Jasjit Singh vs. Union of India and others, decided on 29.07.2024, and Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. The core of the dispute revolved around the validity of notices and proceedings initiated without adhering to the faceless assessment procedure mandated by Section 144B of the Act.

What were the issues?

1. Whether circulars or instructions issued by the Board could override statutory provisions or render them otiose, particularly concerning legislative enactments with financial implications. (Question of law, concerning the interpretation and application of Sections 119, 120, and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee implicitly relies on the precedent set in Jasjit Singh and Jatinder Singh Bhangu, arguing that the notices and proceedings are invalid if they bypass statutory mandates like faceless assessment. The assessee's argument is that circulars cannot override statutory provisions, and legislative enactments must be followed strictly. Revenue's Contention: The revenue, through its learned counsel, accepted notice and did not present a distinct argument against the petitioner's position, agreeing that the issue was concluded by prior judgments of the court. The revenue did not suggest any grounds to distinguish the present case from the precedents.

Which sections of the Income-tax Act were involved?

Section 119,Section 120,Section 144B,Section 148

AI-generated summary — verify with the full judgment below

130

Shri Krishna P

Union of Indi

CORAM: H

Present: 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 Poultry Farm

Vs. a and others

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE ALO Mr. Satyam Aneja, Advocate for

RAKASH SHARMA, J.(Oral) Notice of motion. Ms. Gauri Neo Rampal, Sr. Stan 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-27601-2024 (O&M) Date of Decision: 15.10.2024

…Petitioner

…Respondents NJEEV PRAKASH SHARMA OK JAIN r the petitioner. ) nding 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 2024.10.16 11:14 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP-27601-2024 (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 2024.10.16 11:14 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP-27601-2024 (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 01.03.2024 and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(ALOK JAIN)

JUDGE 15.10.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No RAJESH KUMAR 2024.10.16 11:14 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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