STUDDS ACCESSORIES LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX

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CWP/31098/2024HC Punjab & HaryanaPHHC01159016202419 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 held that notices issued under Section 148 of the Income Tax Act, 1961, and the consequential proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, were contrary to the provisions of the Act. The Court agreed with the view taken by the Coordinate Bench in Jasjit Singh (supra) and Jatinder Singh Bhangu (supra). The reasoning was that instructions by the Board, such as those leading to faceless assessments, cannot override statutory provisions or make them otiose. Legislative enactments having financial implications must be followed strictly. The authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. Instructions and circulars can only supplement statutory provisions for their implementation. Therefore, notices dated 31.08.2024, 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, along with Annexure P-9, were set aside for want of jurisdiction. The revenue was at liberty to follow the procedure laid down under the Act. No issue was expressly left undecided.

What were the facts?

The petitioner, Studds Accessories Limited, filed a writ petition challenging certain notices and proceedings initiated under Section 148 of the Income Tax Act, 1961. The Revenue, represented by the Assistant Commissioner of Income Tax, was the respondent. The assessment year(s) are not explicitly stated but relate to proceedings initiated under Section 148. The challenge was to notices dated 31.08.2024, 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and consequential proceedings. The High Court noted that the issue had been considered in prior judgments by a Coordinate Bench in CWP No. 215509 of 2023 (Jasjit Singh vs. Union of India) and CWP No. 157745 of 2024 (Jatinder Singh Bhangu vs. Union of India). The amount in dispute is not specified. The procedural history involves the issuance of notices under Section 148 and subsequent faceless assessment proceedings.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and subsequent faceless assessment proceedings initiated without conducting a proper assessment as envisaged under Section 144B of the Act, are contrary to the provisions of the Act and liable to be set aside? (Mixed question of law and fact, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The petitioner implicitly challenges the validity of the notices and proceedings based on the reasoning adopted by the High Court in prior similar cases. The petitioner relies on the judgments of the Coordinate Bench in Jasjit Singh and Jatinder Singh Bhangu. Revenue's Contention: The revenue, through its counsel, acknowledged that the issue had been finally examined and concluded by this Court in the aforementioned writ petitions. They did not present any arguments to distinguish the present case from the precedents cited.

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-31098-202

132

IN TH Studds Acces The Assistant CORAM: H

H Present: M

SANJEEV P

1.

Notice 2. Mr. Va respond 3. Both th petition No.215 decided No.157 and oth held as 24(O&M)

Page 1 of 3 HE HIGH COURT OF PUNJA CHANDIGAR

sories Limited

Vs.

t Commissioner of Income Tax a **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr.Vishal Kalra, Advocate for th (through video conferencing). Mr. Varun Issar, Sr. Standing Co for the respondents/Revenue. **** RAKASH SHARMA, J.(Oral) of motion. arun Issar, Sr. Standing Couns dents/Revenue. he counsel are ad idem that the n stands finally examined and co 509 of 2023 titled as Jasjit Singh d on 29.07.2024, and by the 745 of 2024 titled as Jatinder Sin hers, decided on 19.07.2024. Th under:

AB AND HARYANA AT RH CWP-31098-2024(O&M) Date of Decision: 19.11.2024 . . . . Petitioner and anr . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH he petitioner. ounsel ) sel accepts notice on behalf of e issue involved in the present oncluded by this Court in CWP h vs. Union of India and others, e Coordinate Bench in CWP ngh Bhangu vs. Union of India his Court in Jasjit Singh (supra)

) 4

r s f t P , P a ) RASHMI 2024.11.21 11:06 I attest to the accuracy and integrity of this document

CWP-31098-202

b i o o i m S S a s a t a s i n s w C u i a A p d 3 f 24(O&M)

Page 2 of 3 “16. We are in agreemen by the Coordinate Bench and hol nstructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen mplications are required to be mandatorily. By exercising the Sections 119 and 120 of the A Section 144B (7 & 8), the a allowed to usurp the legal pro satisfaction and convenience ca assessees. It also leaves confusio taxpayers. In the opinion of th and circulars can be issued on supplementing the statutory pro mplementation. 17. In view of the aforesa no occasion to distinguish or ta suggested by the learned counse what has already been held by th 18. Keeping in view the Coordinate Bench (supra), notic under Section 148 of the Act, 196 nitiated thereafter without con assessment as envisaged under Act, 1961, have been found to provisions of the Act, 1961 an dated 28.02.2023, 16.03.202 30.03.2023 and order dated 30. for want of jurisdiction.

nt with the view taken ld that such circular or not have been issued to to make them otiose or nts having financial followed strictly and powers contained in Act, 1961 as well as authorities cannot be ovisions to their own ausing hardship to the on in the minds of the his Court, instructions nly for the purpose of ovisions and for their aid discussion, there is ake a different view as el for the revenue from he Coordinate Bench. law laid down by the ces issued by the JAO 61 and the proceedings nducting the faceless r Section 144B of the o be contrary to the d accordingly notices 23, 20.03.2024 and 03.2023, are set aside

RASHMI 2024.11.21 11:06 I attest to the accuracy and integrity of this document

CWP-31098-202

a t i w 4. Keepin terms. mutand (Annex Section proceed 5. All pen

November 19, rashmi 1. Whethe 2. Whethe 24(O&M)

Page 3 of 3 19. The respondents-reven at liberty to follow the procedur the Act, 1961 and proceed accord 20. All the writ petition nterim order passed by the Cou with the present order.”

ng in view above, we allow this The observations and order pa dis to the present case. Accord xure P-9) issued by Jurisdict n 148 of the Income Tax Act dings thereof are set aside. nding applications also stand disp

(SANJ , 2024 r speaking/reasoned?

Y r reportable?

nue would be, however, re as laid down under dingly, if so advised. ns are allowed. The urt shall stand merged s Writ Petition in the aforesaid assed above shall apply mutatis dingly, notice dated 31.08.2024 tional Assessing Officer under t, 1961 and the consequential posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d s 4 r l RASHMI 2024.11.21 11:06 I attest to the accuracy and integrity of this document

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