BANSAL RICE AND GENERAL MILLS vs. NATIONAL FACELESS ASSESSMENT CENTRE AND ORS

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CWP/28039/2024HC Punjab & HaryanaPHHC01141800202418 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, in agreement with its previous decisions in Jasjit Singh vs. Union of India and others (CWP No.21509 of 2023, decided on 29.07.2024) and Jatinder Singh Bhangu vs. Union of India and others (CWP No.15745 of 2024, decided on 19.07.2024), held that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. The Court found that legislative enactments with financial implications must be followed strictly. It was held that authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Instructions and circulars can only supplement statutory provisions. Consequently, notices issued by the JAO under Section 148A(b) and Section 148, the order under Section 148A(d), and consequential proceedings were set aside for want of jurisdiction, as faceless assessment under Section 144B was not conducted. The revenue was granted liberty to follow the procedure laid down under the Act if advised. The writ petition was allowed.

What were the facts?

The petitioner, Bansal Rice & General Mills, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148A(b) of the Income Tax Act, 1961, dated February 17, 2023, and February 28, 2023. The petitioner also challenged the order issued under Section 148A(d) dated April 10, 2023, and the notice issued under Section 148 dated April 10, 2023, along with consequential proceedings. The revenue, represented by the National Faceless Assessment Centre and others, accepted notice. Both parties agreed that the issue was concluded by prior judgments of the same court.

What were the issues?

1. Whether notices issued under Section 148A(b) and Section 148 of the Income Tax Act, 1961, and the order under Section 148A(d), along with consequential proceedings, are liable to be set aside for want of jurisdiction, particularly when faceless assessment as envisaged under Section 144B of the Act was not conducted. Assessee's Contention: The assessee argued that the proceedings initiated by the JAO were contrary to the provisions of the Act, specifically Section 144B, which mandates faceless assessment. They relied on the principle that circulars or instructions cannot override statutory provisions. Revenue's Contention: The revenue, through Sr. Standing Counsel, accepted notice and did not present any distinct arguments against the assessee's position, agreeing that the matter was concluded by previous judgments.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

CWP-28039-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 111 CWP-28039-2024

Decided on : 18.10.2024 Bansal Rice & General Mills . . . Petitioner(s) Versus National Faceless Assessment Centre and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. Divya Suri, Advocate and Mr. Sachin Bhardwaj, 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 19:05 I attest to the accuracy and authenticity of this document

CWP-28039-2024 - 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 19:05 I attest to the accuracy and authenticity of this document

CWP-28039-2024 - 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 17.02.2023 and 28.02.2023, order issued u/s 148A(d) of the Act, dated 10.04.2023 and notice issued u/s 148 of the Act, dated 10.04.2023, 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 18, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.10.18 19:05 I attest to the accuracy and authenticity of this document

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