RAKESH vs. UNION OF INDIA AND OTHERS

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CWP/27808/2024HC Punjab & HaryanaPHHC01140822202416 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, setting aside the notices and consequential proceedings. The Court held 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. The authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions. Therefore, notices issued by the JAO under Section 148 of the Act and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, were found to be contrary to the Act. The Court specifically set aside notices dated 28.02.2023 and 09.03.2023 issued under Section 148A(b), order dated 27.03.2023 under Section 148A(d), and notice dated 28.03.2023 under Section 148 of the Act, along with consequential proceedings, for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised.

What were the facts?

The petitioner, Rakesh, filed a writ petition before the High Court of Punjab and Haryana at Chandigarh. The respondents were the Union of India and others (revenue). The petitioner sought relief against notices and orders issued by the Jurisdictional Assessing Officer (JAO) under Sections 148A and 148 of the Income Tax Act, 1961. The core of the dispute concerned the procedure followed for reassessment proceedings. The petitioner argued that the assessment was not conducted in a faceless manner as envisaged under Section 144B of the Act. The revenue accepted notice, and both parties agreed that the issue was covered by previous judgments of the High Court.

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 contrary to the provisions of the Act, 1961? (Question of law and mixed fact and law, turning on Sections 144B and 148 of the Income Tax Act, 1961). Assessee's Contention: The assessment proceedings were vitiated as they were not conducted in a faceless manner as mandated by Section 144B of the Act, leading to a lack of jurisdiction. The petitioner relied on the High Court's decision in Jasjit Singh vs. Union of India and others. Revenue's Contention: The revenue, through Sr. Standing Counsel, accepted notice and did not present a distinct argument against the petitioner's reliance on the precedent. Both parties were ad idem that the issue was concluded by prior judgments.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

CWP-27808-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 149 CWP-27808-2024

Decided on : 16.10.2024 Rakesh . . . Petitioner(s) Versus Union of India and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Sandeep Goyal, Advocate for the petitioner(s). Ms. Gauri Neo Rampal, Sr. Standing Counsel for the respondents – revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Ms. Gauri Neo Rampal, 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-27808-2024 - 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-27808-2024 - 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, notices issued by the Jurisdictional Assessing Officer u/s 148A(b) of the Income Tax Act, 1961, dated 28.02.2023 and 09.03.2023, order issued u/s 148A(d) of the Act, dated 27.03.2023 and notice issued u/s 148 of the Act, dated 28.03.2023, 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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