LAVANYA KAMBOJ vs. INCOME TAX OFFICER

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CWP/29614/2024HC Punjab & HaryanaPHHC01149924202429 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 make them obsolete. Legislative enactments with financial implications must be strictly followed. The court reiterated its view from the Jasjit Singh case, stating that authorities cannot use their powers under Sections 119 and 120, as well as Section 144B(7) & (8), to usurp legal provisions for their convenience, causing hardship and confusion to taxpayers. Instructions and circulars are meant to supplement, not contradict, statutory provisions. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessment as per Section 144B were found to be contrary to the Act and set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure. The specific 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. In the present case, the notice dated 02.04.2022 and consequential proceedings were also set aside. The court explicitly stated that its observations and order would apply mutatis mutandis.

What were the facts?

The petitioner, Lavanya Kam, challenged notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The case was heard by the Punjab and Haryana High Court. The High Court noted that the issue involved in this petition was identical to that in previous 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 referred to its own prior decision in Jasjit Singh, which dealt with similar notices and proceedings.

What were the issues?

1. Whether circulars or instructions issued by the Board could override statutory provisions or render them otiose, particularly concerning legislative enactments with financial implications (Section 119, Section 120, Section 144B(7) & (8) of the Income Tax Act, 1961)? 2. Whether notices issued by the JAO under Section 148 and subsequent proceedings, without conducting faceless assessment as envisaged under Section 144B, are contrary to the provisions of the Income Tax Act, 1961? Assessee's Contention: The assessee implicitly argued, by relying on the precedent of Jasjit Singh, that the notices and proceedings were invalid because they bypassed the mandatory faceless assessment procedure. The High Court's prior decision in Jasjit Singh held that circulars cannot override statutory provisions and that faceless assessment under Section 144B is mandatory. Revenue's Contention: The revenue, through its counsel, suggested that the court should distinguish the present case from the previous ones. However, the court found no occasion to take a different view.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

150

Lavanya Kam

Income Tax O

CORAM: H

Present: M

SANJEEV P 1.

N 2.

M behalf of the r 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 mboj

Vs. Officer

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Sunil K. Mukhi, Advocate w Mr. Iqbal Roshan, Advocate for t RAKASH SHARMA, J.(Oral) Notice of motion. Mr. Ranvijay Singh, Sr. Standi 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 “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-29614-2024 (O&M) Date of Decision: 29.10.2024

…Petitioner

…Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH with the petitioner.

) ing Counsel, accepts notice on 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

n 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-29614-2024

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-29614-2024

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 02.04.2022 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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