DAMANPREET KAUR vs. NATIONAL FACELESS ASSESSMENT CENTRE (NAFAC), DELHI

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CWP/28503/2024HC Punjab & HaryanaPHHC01143848202421 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 held that notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and the proceedings initiated thereafter, without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, are contrary to the provisions of the Act. The Court agreed with its previous decision in Jasjit Singh vs. Union of India and others, stating that circulars or instructions by the Board cannot override statutory provisions or make them obsolete. Legislative enactments with financial implications must be followed strictly. The Court found that by exercising powers under Sections 119 and 120 of the Act, as well as Section 144B (7 & 8), authorities cannot usurp legal provisions to their own satisfaction and convenience, causing hardship to assessees. Therefore, the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and the order dated 30.03.2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, if advised. In the present case, the notice dated 24.03.2024 and consequential proceedings were set aside. The ratio is that faceless assessment procedures mandated by statute cannot be bypassed by issuing notices without adhering to them, and such deviations render the proceedings without jurisdiction.

What were the facts?

The petitioner, Damanpreet Kaur, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Income Tax Officer under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue accepted notice. The High Court noted that the substantial issue had been concluded by its own prior decision in CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) decided on 29.07.2024, and a Coordinate Bench decision in CWP No. 15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on 19.07.2024. The impugned notices were dated 24.03.2024.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer 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, 1961, are contrary to the provisions of the Act, 1961 and liable to be set aside for want of jurisdiction. Assessee's Contention: The assessee, through their counsel, argued that the issue had been finally decided by the High Court in previous writ petitions, specifically citing Jasjit Singh vs. Union of India and others. They relied on the principle that circulars or instructions by the Board cannot override statutory provisions or make them obsolete, and that legislative enactments with financial implications must be followed strictly. They contended that authorities cannot usurp legal provisions for their convenience, causing hardship to assessees, and that instructions and circulars can only supplement statutory provisions. Revenue's Contention: The revenue, through its counsel, accepted notice. The judgment does not record specific arguments made by the revenue against the assessee's contentions, but it notes that the revenue suggested a distinction from the previously decided cases, which the Court rejected.

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

123 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-28503-2024 (O&M) Date of Decision: 21.10.2024 Damanpreet Kaur …Petitioner Vs. Income Tax Officer and others …Respondents CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH Present: Mr. Vishav Bharti Gupta, Advocate; Mr. Ubhai Bharti Gupta, Advocate; Ms. Mamta Gupta, Advocate and Ms. Uma Bharti, Advocate for the petitioner.

SANJEEV PRAKASH SHARMA, J.(Oral) 1. Notice of motion. 2. Mr. Ranvijay Singh, Sr. Standing Counsel accepts notice on behalf of the revenue. 3. Mr. Yogesh Putney, Sr. Standing counsel and Mr. Vaibhav Gupta, Standing counsel accept notice for respondents No. 2 &3. 3. Learned counsel for the parties are ad idem that the substantial 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 JOYTI RANI 2024.10.23 17:42 I attest to the accuracy and integrity of this document

[2] CWP-28503-2024 (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. JOYTI RANI 2024.10.23 17:42 I attest to the accuracy and integrity of this document

[3] CWP-28503-2024 (O&M) 20. All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.” 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 under Section 148 of the Income Tax Act, dated 24.03.2024 and all consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH ) JUDGE 21.10.2024 joyti 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable? : Yes/No JOYTI RANI 2024.10.23 17:42 I attest to the accuracy and integrity of this document

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