GURDIAL SINGH vs. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

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CWP/29617/2024HC Punjab & HaryanaPHHC01150262202429 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. The court reiterated that legislative enactments must be followed strictly and mandatorily. Authorities cannot use 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 assessees. Instructions and circulars can only supplement statutory provisions and aid in their implementation. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings initiated without conducting faceless assessments as per Section 144B were found to be contrary to the Act. The court set aside the notices dated 22.02.2024 and all consequential proceedings for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure under the Act if advised. The interim order merged with the final order, and all pending applications were disposed of.

What were the facts?

The petitioner, Gurdial 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, represented by the Principal Chief Commissioner of Income Tax, accepted notice. The parties agreed that the issue was identical to those decided in previous writ petitions, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India) and CWP No. 1574 of 2024 (Jatinder Singh Bhangu vs. Union of India), both decided on 29.07.2024 and 19.07.2024 respectively. The High Court had previously held that circulars and instructions from the Board could not override statutory provisions or render them obsolete. The present petition sought similar relief.

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 a faceless assessment as envisaged under Section 144B of the Act, are valid and in accordance with law? Assessee's Contention: The assessee argued that the notices and proceedings were contrary to the Act, particularly Section 144B, as they were initiated without the mandatory faceless assessment procedure. The assessee relied on the decisions in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, where similar notices and proceedings were set aside. Revenue's Contention: The revenue, through its counsel, accepted notice and acknowledged that the substantial issue was already decided by a coordinate bench. The revenue did not present any distinct arguments to counter the assessee's position or the precedent set by the earlier 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

152

Gurdial Singh

Principal Chie

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 m f IN THE HIGH COURT OF PUN AT CHANDIGA C D h

Vs. ef Commissioner of Income Tax

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Rohit Sud, Advocate for the 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 make them otiose or obsolete. financial implications are requi NJAB AND HARYANA ARH CWP-29617-2024 (O&M) Date of Decision: 29.10.2024

…Petitioner x NWR and others

…Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH 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 Legislative enactments having ired to be followed strictly and n l d f n a s e d

g d RAJESH KUMAR 2024.11.04 15:00 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2] CWP-29617-2024

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

RAJESH KUMAR 2024.11.04 15:00 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3] CWP-29617-2024

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 22.02.2024 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 15:00 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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