GOPAL CHAND vs. ASSISTANT/ DEPUTY COMMISSIONER INCOME TAX CENTRAL CIRCLE , PATIALA

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CWP/33979/2024HC Punjab & HaryanaPHHC01177553202417 December 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court, in agreement with the view taken by its Coordinate Bench in Jasjit Singh vs. Union of India and others, held that circulars or instructions issued by the Board cannot override statutory provisions or render them otiose. Legislative enactments with financial implications must be followed strictly and mandatorily. 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 of the Act, 1961, and proceedings initiated thereafter without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, were found to be contrary to the Act and set aside for want of jurisdiction. The specific notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and order dated 30.03.2023, in the Jasjit Singh case were set aside. In the present case, the notice dated 29.02.2024 issued under Section 148 and consequential proceedings were also set aside. The Revenue was granted liberty to follow the procedure laid down under the Act, 1961, if so advised. All writ petitions were allowed.

What were the facts?

The petitioner, Gopal Chand, filed a writ petition before the High Court of Punjab and Haryana at Chandigarh challenging a notice dated 29.02.2024 issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings initiated by the Jurisdictional Assessing Officer. The Revenue accepted notice. Both parties agreed that the issue had been decided by the High Court in previous cases, specifically 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 in Jasjit Singh had examined the validity of notices issued under Section 148 and proceedings initiated without conducting faceless assessment as envisaged under Section 144B.

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 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? (Question of law and mixed fact and law, concerning Sections 148 and 144B of the Income Tax Act, 1961). Assessee's Contention: The assessee, through their counsel, argued that the issue in the present petition has been finally examined and concluded by the High Court in previous judgments, which held that circulars or instructions cannot override statutory provisions and that proceedings initiated without faceless assessment under Section 144B are contrary to the Act. The assessee relied on the High Court's decision in Jasjit Singh vs. Union of India and others. Revenue's Contention: The Revenue, through their counsel, accepted notice and agreed that the issue stands finally examined and concluded by the High Court in the aforementioned cases. They did not present any distinct arguments against the assessee's position.

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-33979-2024 (O&M) Page 1 of 3 136 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-33979-2024 (O&M) Date of Decision: 17.12.2024 GOPAL CHAND . . . . Petitioner Vs. ASSISTANT/DEPUTY COMMISSIONER INCOME TAX CENTRAL CIRCLE PATIALA . . . . Respondents **** CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Present: Mr. Rishabh Kapoor, Advocate, for the petitioner. for the respondent(s) – Revenue. **** SANJEEV PRAKASH SHARMA, J.(Oral) 1. Notice of motion. 2. accepts notice on behalf of respondent/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: LAVISHA 2024.12.19 14:04 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

CWP-33979-2024 (O&M) Page 2 of 3 “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, 20.03.2024 and 30.03.2023 and order dated 30.03.2023, are set aside for want of jurisdiction. LAVISHA 2024.12.19 14:04 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

CWP-33979-2024 (O&M) Page 3 of 3 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 29.02.2024 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 December 17, 2024 Lavisha 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No LAVISHA 2024.12.19 14:04 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court, Chandigarh

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