BHIM SEN vs. UNION OF INDIA

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CWP/31008/2024HC Punjab & HaryanaPHHC01159168202418 November 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court, following its own previous decisions in Jasjit Singh and Jatinder Singh Bhangu, held that circulars or instructions issued by the Board cannot override statutory provisions or render them obsolete. Legislative enactments with financial implications must be strictly followed. The court found that the authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to taxpayers. Instructions and circulars can only supplement statutory provisions for implementation. Consequently, notices issued by the JAO under Section 148 and subsequent proceedings, when conducted without the faceless assessment procedure under Section 144B, were found to be contrary to the Act. The notices dated 21.03.2024 and consequential proceedings were set aside for want of jurisdiction. The revenue was granted liberty to follow the prescribed procedure if advised. The operative direction was to set aside the impugned notices and proceedings.

What were the facts?

The petitioner, Bhim Sen, filed a writ petition before the High Court of Punjab and Haryana challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The revenue, Union of India and others, accepted notice. Both parties agreed that the issue had been decided by the same court in previous writ petitions, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India) decided on July 29, 2024, and CWP No. 15745 of 2024 (Jatinder Singh Bhangu vs. Union of India) decided on July 19, 2024. The present petition sought similar relief based on the precedents set in those cases.

What were the issues?

1. Whether notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and subsequent proceedings are valid if conducted without adhering to the faceless assessment procedure envisaged under Section 144B of the Act, 1961? (Question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's contention: The notices and proceedings are contrary to the Act as they were initiated without conducting faceless assessments as mandated by Section 144B. The court's power under Sections 119 and 120, along with Section 144B(7 & 8), cannot be used to override statutory provisions or cause hardship to assessees. Revenue's contention: Not explicitly recorded in the judgment, but implied by their acceptance of notice and the court's reference to their arguments in prior cases where they likely argued for the validity of the notices.

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

CWP-31008-2024 (O&M) - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 148 CWP-31008-2024 (O&M) Decided on : 18.11.2024 Bhim Sen . . . 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. Mukesh Pandey, Advocate, for the petitioner(s). Ms. Gauri Neo Rampal, Sr. Standing Counsel for the respondent(s) - revenue. **** SANJEEV PRAKASH SHARMA

, J. (Oral) 1. Notice of motion. 2. Ms. Gauri Neo Rampal, Sr. Standing Counsel, accepts notice for the respondents - 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 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 JAWALA RAM 2024.11.19 12:55 I attest to the accuracy and authenticity of this document

CWP-31008-2024 (O&M) - 2 - 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.” 4. Keeping in view above, we allow this Writ Petition in the JAWALA RAM 2024.11.19 12:55 I attest to the accuracy and authenticity of this document

CWP-31008-2024 (O&M) - 3 - 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 148 of the Income Tax Act, 1961, dated 21.03.2024, and consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE November 18, 2024 J.Ram Whether speaking/reasoned: Yes/No Whether Reportable: Yes/No JAWALA RAM 2024.11.19 12:55 I attest to the accuracy and authenticity of this document

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