NOVA AND IRON STEEL LIMITED vs. UNION OF INDIA AND OTHERS

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CWP/31506/2024HC Punjab & HaryanaPHHC01162814202422 November 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryAllowed

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 followed strictly and mandatorily. The court agreed with the view taken by its coordinate benches that instructions by the Board cannot be issued to override statutory provisions or to make them otiose. The court further held that assessment proceedings initiated under Section 148 of the Income Tax Act, 1961, without conducting the faceless assessment as envisaged by Section 144B (7 & 8) of the Act, are contrary to the provisions of the Act and are without jurisdiction. Consequently, the notices dated 31.08.2024, 23.03.2024, 16.03.2023, 20.03.2023, and 30.03.2023, along with all consequential proceedings, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act and proceed accordingly, if so advised. The writ petition was allowed, and interim orders stood merged with the present order.

What were the facts?

The petitioner, Ess Kay Iron Steel Limited, filed a writ petition challenging a notice dated 31.08.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and all consequential proceedings. The petitioner argued that the assessment proceedings were initiated without conducting a faceless assessment as envisaged by Section 144B of the Act. The revenue, represented by the Income Tax Department, appeared through its counsel. The High Court noted that similar issues had been decided by coordinate benches in previous writ petitions, specifically Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. The court was presented with the question of whether circulars or instructions issued by the Board could override statutory provisions or render them obsolete.

What were the issues?

1. Whether circulars or instructions issued by the Board can override statutory provisions or make them obsolete, particularly concerning the mandatory implementation of legislative enactments with financial implications (Section 119 and 120 of the Income Tax Act, 1961)? (Question of law) 2. Whether the assessment proceedings initiated under Section 148 of the Income Tax Act, 1961, without conducting a faceless assessment as envisaged by Section 144B (7 & 8) of the Act, are valid and have jurisdiction? (Question of mixed law and fact) Assessee's contentions: The petitioner argued that the assessment proceedings were initiated without adhering to the mandatory provisions of faceless assessment under Section 144B of the Income Tax Act, 1961, rendering the notice and subsequent proceedings invalid for want of jurisdiction. They relied on the principle that authorities cannot usurp legal provisions for their convenience, causing hardship and confusion to assessees. Revenue's contentions: The revenue did not present any specific arguments against the petitioner's contentions. The judgment notes that the learned counsel for the revenue was present and accepted notice, but no opposing arguments were recorded.

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

122 IN TH NOVA AND IR

UNION OF IN

CORAM: H

Present: M

M M f

* SANJEEV PR

1.

N 2. M behalf of the r 3. B present petitio No.21509 of decided on 29 2024 titled a decided on 19

C i o o i m HE HIGH COURT OF PUNJA CHANDIGAR

CWP-3 Date of IRON STEEL LIMITED V NDIA AND OTHERS

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ

Mr. Prateek Gupta, Advocate for Mr. Yogesh Putney, Senior Stand Mr. Vaibhav Gupta, Standing Co for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Mr. Yogesh Putney, Senior Stan respondents/Income Tax Departm Both the counsel are ad idem on stands finally examined and c f 2023 titled as Jasjit Singh vs 9.07.2024, and by the Coordina as Jatinder Singh Bhangu vs. 9.07.2024. This Court in Jasjit Si “16. We are in agreement with Coordinate Bench and hold t instructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen implications are required to be mandatorily. By exercising the AB AND HARYANA AT RH 31506-2024 (O&M) f Decision:22.11.2024

..…...Petitioner(s) V/s. …......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH r the petitioner. ding Counsel, with ounsel, Department. nding Counsel, accepts notice on ment. that the issue involved in the concluded by this Court in CWP s. Union of India and others, ate Bench in CWP No.15745 of . Union of India and others, Singh (supra) held as under: the view taken by the that such circular or not have been issued to to make them otiose or nts having financial e followed strictly and powers contained in

n e P , f , Suresh Kumar 2024.11.25 14:09 I attest to the accuracy and integrity of this document

CWP-31506-202

S S a s a t a s i 1 o s w 1 C u p f o p d 3 f 1 l A 2 o p

4.

K aforesaid term mutandis to (Annexure P- 024 (O&M) Page 2 of 3

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 implementation. 17. In view of the aforesaid d occasion to distinguish or take suggested by the learned counse what has already been held by th 18. Keeping in view the law Coordinate Bench (supra), notic under Section 148 of the proceedings initiated thereafter w faceless assessment as envisage of the Act, 1961, have been foun provisions of the Act, 1961 an dated 28.02.2023, 16.03.202 30.03.2023 and order dated 30. for want of jurisdiction. 19. The respondents-revenue w liberty to follow the procedure a Act, 1961 and proceed according 20. All the writ petitions are order passed by the Court shall present order.” Keeping in view above, we a ms. The observations and order p the present case. According -4) issued by the Jurisdictional A 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 discussion, there is no e a different view as el for the revenue from he Coordinate Bench. w laid down by the ces issued by the JAO Act, 1961 and the without conducting the ed under Section 144B d to be contrary to the nd accordingly notices 23, 20.03.2024 and 03.2023, are set aside would be, however, at as laid down under the gly, if so advised. allowed. The interim stand merged with the allow this Writ Petition in the passed above shall apply mutatis gly, notice dated 31.08.2024 Assessing Officer u/s 148 of the e s 4 e Suresh Kumar 2024.11.25 14:09 I attest to the accuracy and integrity of this document

CWP-31506-202

Income Tax aside. 5. A

November 22 Ess Kay

Whether speak Whether Repor 024 (O&M) Page 3 of 3

Act, 1961 and all consequenti All pending applications also stan [SANJEEV 2, 2024

[SAN

king / reasoned :

Y rtable

Y ial proceedings thereof are set nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No t Suresh Kumar 2024.11.25 14:09 I attest to the accuracy and integrity of this document

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