VARINDER SINGH vs. INCOME TAX OFFICER AND OTHERS

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CWP/29581/2024HC Punjab & HaryanaPHHC01149672202429 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 cannot override statutory provisions or render them otiose. 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 for their convenience, causing hardship and confusion to taxpayers. Instructions and circulars can only supplement statutory provisions for their implementation. Therefore, notices issued by the JAO under Section 148 of the Act, 1961, and proceedings initiated thereafter without conducting faceless assessments as envisaged under Section 144B of the Act, 1961, were found to be contrary to the provisions of the Act. Consequently, the notices and subsequent proceedings were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, if so advised. The writ petition was allowed in these terms.

What were the facts?

The petitioner, Varinder Singh, filed a writ petition challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue was represented by the Income Tax Officer and others. The High Court noted that the issue involved in the present petition was identical to that decided in a previous case, Jasjit Singh vs. Union of India and others, decided on 29.07.2024, and Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. The Court referred to its earlier decision in Jasjit Singh, which dealt with similar notices and proceedings initiated without conducting faceless assessments as envisaged under Section 144B of the Act. The specific notices challenged in the present petition were dated 06.04.2022.

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 assessments 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, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee argued, by reference to the cited judgments, that notices and proceedings initiated without faceless assessment were contrary to law. The Court in Jasjit Singh held that circulars or instructions by the Board could not override statutory provisions and that legislative enactments with financial implications must be followed strictly. The Court also held that authorities cannot usurp legal provisions for their convenience, causing hardship, and that instructions/circulars can only supplement statutory provisions. Revenue's Contention: The revenue suggested a distinction or a different view from the Coordinate Bench's decision in Jasjit Singh, but the Court found no occasion to do so.

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

135

Varinder Sing

Income Tax O

CORAM: H

Present: M M

SANJEEV P 1.

N 2.

M Sandhu, Jr. S notice on beha 3.

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

Vs. Officer and others

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. B.M. Monga, Advocate with Mr. Rohit Kaura, Advocate for th

RAKASH SHARMA, J.(Oral) Notice of motion. Mr. Saurabh Kapoor, Sr. Stand Standing Counsel and Ms. Mus alf of the revenue. 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 NJAB AND HARYANA ARH CWP-29581-2024 (O&M) Date of Decision: 29.10.2024

…Petitioner

…Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH h he petitioner. ) ding Counsel, with Ms. Pridhi skaan Gupta, Advocate, accepts 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

i s l d f n a s 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-29581-2024 (O&M)

“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 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. 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-29581-2024 (O&M)

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.”

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 06.04.2022 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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