DURABLE FLANGES PRIVATE LIMITED vs. INCOME TAX OFFICER AND OTHERS

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CWP/27802/2024HC Punjab & HaryanaPHHC01133397202416 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 allowed the writ petition, setting aside the notice issued by the Jurisdictional Assessing Officer under Section 148A(b) dated 30.03.2024, the order issued under Section 148A(d) dated 15.04.2024, and the notice issued under Section 148 dated 15.04.2024, along with consequential proceedings. The Court followed its previous decisions in Jasjit Singh and Jatinder Singh Bhangu. The reasoning was that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be followed strictly. Authorities cannot usurp legal provisions for their convenience, causing hardship. Instructions and circulars can only supplement statutory provisions. Therefore, notices and proceedings initiated without conducting faceless assessment as envisaged under Section 144B were found to be contrary to the Act and set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act if so advised. All pending applications were disposed of.

What were the facts?

The petitioner, Durable Flanges Private Limited, filed a writ petition before the High Court of Punjab and Haryana challenging notices and an order related to reassessment proceedings. The revenue, represented by the Income Tax Officer and others, accepted notice. Both parties agreed that the issue was covered by previous High Court judgments in CWP No.21509 of 2023 (Jasjit Singh vs. Union of India) decided on 29.07.2024, and CWP No.15745 of 2024 (Jatinder Singh Bhangu vs. Union of India) decided on 19.07.2024. These prior judgments dealt with the validity of reassessment proceedings initiated without conducting faceless assessments as envisaged under Section 144B of the Income Tax Act, 1961.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148A(b) and Section 148 of the Income Tax Act, 1961, and the consequential order under Section 148A(d), are valid when faceless assessment as envisaged under Section 144B of the Act was not conducted. Assessee's Contention: The assessee relied on the judgments in Jasjit Singh and Jatinder Singh Bhangu, arguing that reassessment proceedings initiated without adhering to the faceless assessment procedure under Section 144B are contrary to the Act and liable to be set aside. Revenue's Contention: The revenue, through its counsel, accepted notice and did not present any arguments against the assessee's position, agreeing that the matter was concluded by previous High Court decisions.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

CWP-27802-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 145 CWP-27802-2024

Decided on : 16.10.2024 Durable Flanges Private Limited . . . Petitioner(s) Versus Income Tax Officer and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Nikhil Goyal, Advocate and Ms. Dewangana Chhillar, Advocate for the petitioner(s). Mr. Varun Issar, Sr. Standing Counsel for the respondents – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Mr. Varun Issar, Sr. Standing Counsel, accepts notice for the respondents – revenue. 3. Both the counsel are ad idem that the issue involved in the present petition stands finally examined and concluded by this Court in CWP No.21509 of 2023 titled as Jasjit Singh vs. Union of India and others, decided on 29.07.2024, and by the Coordinate Bench in CWP No.15745 of 2024 titled as Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. This Court in Jasjit Singh (supra) held as under: “16. We are in agreement with the view taken by the Coordinate Bench and hold that such circular or instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having JAWALA RAM 2024.10.18 19:06 I attest to the accuracy and authenticity of this document

CWP-27802-2024 - 2 - 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. 20. All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.” JAWALA RAM 2024.10.18 19:06 I attest to the accuracy and authenticity of this document

CWP-27802-2024 - 3 - 4. 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 u/s 148A(b) of the Income Tax Act, 1961, dated 30.03.2024, order issued u/s 148A(d) of the Act, dated 15.04.2024 and notice issued u/s 148 of the Act, dated 15.04.2024, as well as consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE October 16, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.10.18 19:06 I attest to the accuracy and authenticity of this document

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