RAMOUS CYCLES INDIA vs. UNION OF INDIA

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CWP/31345/2024HC Punjab & HaryanaPHHC01161220202421 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 vs. Union of India and Jatinder Singh Bhangu vs. Union of India, 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 authorities cannot usurp legal provisions for their convenience, causing hardship to assessees, and that instructions and circulars can only supplement statutory provisions. 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 and set aside for want of jurisdiction. The Revenue was granted liberty to follow the procedure laid down under the Act if advised. The writ petition was allowed in terms of the cited judgments, setting aside the notice dated 15.04.2024 and consequential proceedings.

What were the facts?

The petitioner, Ramous Cycles India, filed a writ petition before the Punjab and Haryana High Court challenging a notice dated 15.04.2024 issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings. The Revenue, represented by Ms. Urvashi Dhugga, Sr. Standing Counsel, accepted notice. Both parties agreed that the issue was concluded by previous High Court judgments. Specifically, they referred to CWP No.21509 of 2023 (Jasjit Singh vs. Union of India and others, decided on 29.07.2024) and CWP No.15745 of 2024 (Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024). The High Court was asked to decide the validity of the assessment proceedings initiated without conducting a faceless assessment as envisaged under Section 144B of the Act.

What were the issues?

1. Whether notices issued by the Joint Assessing Officer (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 contrary to the provisions of the Act, 1961, and liable to be set aside for want of jurisdiction? (Mixed question of law and fact, turning on Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee implicitly relies on the precedents established in Jasjit Singh and Jatinder Singh Bhangu, arguing that proceedings initiated without adhering to the faceless assessment procedure under Section 144B are invalid. The petitioner seeks to have the notice and consequential proceedings set aside. Revenue's Contention: The revenue, through its counsel, acknowledged that the issue was concluded by previous judgments of the High Court. They did not present any arguments to distinguish the present case from the cited precedents, implying an acceptance of the legal position laid down in those 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

(O&M) 1 113 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-31345-2024 (O&M)

Date of Decision: 21.11.2024 RAMOUS CYCLES INDIA ....Petitioner Vs. UNION OF INDIA AND OTHERS ....Respondents **** CORAM:HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Present: Mr. Ashish Jhamb, Advocate for the petitioner. Ms. Urvashi Dhugga, Sr. Standing Counsel for the respondents/Revenue. Mr. Ranvijay Singh, Sr. Standing Counsel for respondent no.2. **** SANJEEV PRAKASH SHARMA, J.(Oral) 1 Notice of motion. 2 Ms. Urvashi Dhugga, Sr. Standing Counsel accepts notice on behalf of respondents/Revenue. Mr. Ranvijay Singh, Sr. Standing Counsel accepts notice on behalf of respondent no.2. 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 KUMUD VERMA 2024.11.25 10:20 I attest to the accuracy and integrity of this document Chandigarh

(O&M) 2 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 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, KUMUD VERMA 2024.11.25 10:20 I attest to the accuracy and integrity of this document Chandigarh

(O&M) 3 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 aforesaid terms. The observations and order passed above shall apply mutatis mutandis to the present case. Accordingly, notice dated 15.04.2024 issued under Section 148 of the Income Tax Act, 1961 by Jurisdictional Assessing Officer as well as the consequential proceedings are set aside. 5. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE 21.11.2024 kv 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No KUMUD VERMA 2024.11.25 10:20 I attest to the accuracy and integrity of this document Chandigarh

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