M/S TRISHLA BUILDERS vs. UNION OF INDIA AND OTHERS

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CWP/28831/2024HC Punjab & HaryanaPHHC01144643202423 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that circulars or instructions issued by the Board could not override statutory provisions or render them obsolete. Legislative enactments with financial implications must be strictly followed. The court found that authorities, by exercising powers under Sections 119 and 120, and Section 144B (7 & 8) of the Act, could not usurp legal provisions for their convenience, causing hardship and confusion to assessees. Instructions and circulars are only for supplementing statutory provisions and their implementation. Consequently, notices issued by the Jurisdictional Assessing Officer under Section 148A(b) dated 31.03.2024, the order issued under Section 148A(d) dated 29.04.2024, and the notice issued under Section 148 dated 29.04.2024, along with consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The ratio decidendi is that faceless assessment procedures mandated by statute cannot be circumvented by administrative instructions or actions, and non-compliance renders subsequent proceedings void.

What were the facts?

The petitioner, M/s Trishla Builders, filed a writ petition before the High Court of Punjab and Haryana challenging notices and orders issued under Sections 148A and 148 of the Income Tax Act, 1961. The revenue, represented by Union of India and others, accepted notice. Both parties agreed that the issue was concluded by prior judgments of the same court. Specifically, the court referred to its decision in CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India) and a coordinate bench's decision in CWP No. 15745 of 2024 (Jatinder Singh Bhangu vs. Union of India). The core of the dispute involved proceedings initiated without conducting faceless assessments as envisaged under Section 144B of the Act.

What were the issues?

1. Whether notices issued 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? (Question of law and mixed fact and law, turning on Sections 144B and 148 of the Income Tax Act, 1961). Assessee's Contention: The assessee argued, by implication through reliance on prior judgments, that the proceedings were invalid because they bypassed the mandatory faceless assessment procedure. The court's prior decisions in Jasjit Singh and Jatinder Singh Bhangu were cited as precedent. Revenue's Contention: The revenue, through its counsel, acknowledged that the issue had been finally examined and concluded by the court in prior cases. They did not present a contrary argument but rather agreed that the present petition should be decided based on the established legal position.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

CWP-28831-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 129 CWP-28831-2024

Decided on : 23.10.2024 M/s Trishla Builders . . . 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. Gurdeep Singh, Advocate for the petitioner(s). Mr. Yogesh Putney, Sr. Standing Counsel for respondent No.2. Ms. Gauri Neo Rampal, Sr. Standing Counsel for respondents No.3 & 4 (appearing through V.C.). **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Mr. Yogesh Putney, Sr. Standing Counsel. Standing Counsel, accepts notice for respondent No.2 (revenue) and Ms. Gauri Neo Rampal, Sr. Standing Counsel, accepts notice for respondents No.3 & 4 (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 JAWALA RAM 2024.10.24 13:09 I attest to the accuracy and authenticity of this document

CWP-28831-2024 - 2 - 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 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. JAWALA RAM 2024.10.24 13:09 I attest to the accuracy and authenticity of this document

CWP-28831-2024 - 3 - 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 u/s 148A(b) of the Income Tax Act, 1961, dated 31.03.2024, order issued u/s 148A(d) of the Act, dated 29.04.2024 and notice issued u/s 148 of the Act, dated 29.04.2024, 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 23, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.10.24 13:09 I attest to the accuracy and authenticity of this document

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