REEMA MITTAL vs. UNION OF INDIA AND OTHERS

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CWP/29561/2024HC Punjab & HaryanaPHHC01150126202429 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 circulars or instructions issued by the Board under Sections 119 and 120 of the Income Tax Act, 1961, cannot override statutory provisions or render them otiose. Legislative enactments with financial implications must be strictly followed. The Court found that authorities cannot usurp legal provisions for their convenience, causing hardship to assessees and confusion. Instructions and circulars are only for supplementing statutory provisions and their implementation. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B were found to be contrary to the Act. The Court set aside the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and the order dated 30.03.2023, for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure. The specific notices challenged in this writ petition, dated 13.03.2024, and consequential proceedings were also set aside.

What were the facts?

The petitioner, Reema Mittal, filed a writ petition before the Punjab and Haryana High Court challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue accepted notice. The Court noted that the substantial issue involved was already decided by a Coordinate Bench in similar cases, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) decided on 29.07.2024, and CWP No. 1574 of 2024 (Jatinder Singh Bhangu vs. Union of India and others) decided on 19.07.2024. The Court was asked to examine whether the notices and proceedings were validly initiated without adhering to the faceless assessment procedure envisaged under Section 144B of the Act.

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, 1961, are contrary to the provisions of the Act and liable to be set aside? (Question of law and mixed fact and law, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee implicitly argued that the notices and proceedings were invalid because they bypassed the mandatory faceless assessment procedure. The Court's reliance on previous judgments suggests the assessee's position was aligned with those rulings. Revenue's Contention: The revenue's counsel accepted notice and did not present a distinct argument against the assessee's position, as the Court found the parties to be 'ad idem' (of the same mind) regarding the substantial issue and the applicability of prior judgments.

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

122

REEMA MIT

UNION OF IN

CORAM: H

Present: M

SANJEEV P 1.

N 2.

M of the revenue 3.

L issue involved by this Court India and oth CWP No.1574 and others, de under: “ B c IN THE HIGH COURT OF PUN AT CHANDIGA C D TTAL

Vs. NDIA AND OTHERS

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Shamsher S. Tomar, Advoca

RAKASH SHARMA, J.(Oral) Notice of motion. Mr. Varun Issar, Sr. Standing Co e. Learned counsel for the parties d in the present petition stands f in CWP No.21509 of 2023 title hers, decided on 29.07.2024, an 745 of 2024 titled as Jatinder Sin ecided on 19.07.2024. This Cour “16. We are in agreement with th Bench and hold that such circul could not have been issued to ove NJAB AND HARYANA ARH CWP-29561-2024 (O&M) Date of Decision: 29.10.2024 …Petitioner …Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH ate for the petitioner. ) ounsel, accepts notice on behalf are ad idem that the substantial finally examined and concluded ed as Jasjit Singh vs. Union of nd by the Coordinate Bench in ngh Bhangu vs. Union of India rt in Jasjit Singh (supra) held as he view taken by the Coordinate lar or instructions by the Board erride statutory provisions or to f l d f n a s e d

RAJESH KUMAR 2024.11.04 14:49 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2] CWP-29561-2024 (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. RAJESH KUMAR 2024.11.04 14:49 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3] CWP-29561-2024 (O&M)

20.

All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.”

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 13.03.2024 and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 29.10.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No RAJESH KUMAR 2024.11.04 14:49 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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