AZZ TRADING CO vs. ASSISTANT COMMISSIONER OF INCOME TAX AND OTHER

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CWP/34503/2024HC Punjab & HaryanaPHHC01172256202419 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 held that notices issued by the Jurisdictional Assessing Officer under Section 148 of the Act, 1961, and the consequential proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, were found to be contrary to the provisions of the Act, 1961. The Court agreed with the view taken by the Coordinate Bench and held that circulars or instructions by the Board cannot override statutory provisions or make them otiose. Legislative enactments having financial implications are required to be followed strictly. The Court found that the notices dated 23.04.2024, 20.03.2024, and 30.03.2023, were liable to be set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure as laid down under the Act, 1961, and proceed accordingly. All pending applications were disposed of. The ratio is that faceless assessment procedures mandated by statute must be followed, and administrative instructions cannot override statutory provisions, especially when they lead to jurisdictional defects.

What were the facts?

The petitioner, A2Z Trading Co., filed a writ petition challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue, represented by the Assistant Commissioner of Income Tax, Circle (1), Gurgaon, was the respondent. The assessment year(s) are not explicitly stated for this specific petition but are implied to be covered by the earlier judgments. The challenge is to the notices dated 23.04.2024, 20.03.2024, and 30.03.2023, and consequential proceedings initiated without conducting a faceless assessment as envisaged under Section 144B of the Act. The High Court noted that the issue had been finally examined and concluded by its Coordinate Bench in similar writ petitions, specifically CWP No. 215 of 2023 (Jasjit Singh vs. Union of India) decided on 29.07.2024, and CWP No. 157 of 2024 (Jatinder Singh Bhangu vs. Union of India) decided on 19.07.2024.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, and consequential proceedings are liable to be set aside for want of jurisdiction, specifically when initiated without conducting a faceless assessment as envisaged under Section 144B of the Act. The assessee's contention, as understood from the reliance on prior judgments, is that the notices and subsequent proceedings are invalid because they were not conducted in accordance with the faceless assessment scheme mandated by Section 144B of the Act. The assessee argues that instructions by the Board cannot override statutory provisions and that the authorities cannot usurp legal provisions for their convenience, causing hardship and confusion. The revenue's contention, as implied by their acceptance of notice and agreement on the issue being concluded, is that the prior judgments of the Coordinate Bench on similar matters should be followed. The revenue did not present any distinct arguments against the assessee's position in this specific judgment.

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-34503-202

114

IN TH A2Z Trading Assistant Com CORAM: H

H Present: M M

M f

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

Co. Vs.

mmissioner of Income Tax Circle **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Anshul Mittal, Advocate and Mr. Shreesh Kakkar, Advocate fo 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-34053-2024(O&M) Date of Decision: 19.12.2024 . . . . Petitioner e (1), Gurgaon and others . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH d or the 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 2024.12.19 16:57 I attest to the accuracy and integrity of this document

CWP-34503-202

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 2024.12.19 16:57 I attest to the accuracy and integrity of this document

CWP-34503-202

a t i w 4. Keepin terms. mutand Jurisdic (P-13) a 5. All pen 19.12. 2024 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. Ac ctional Assessing Officer under as well as the consequential proc nding applications also stand disp

(SANJ 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 ccordingly, notice issued by r Section 148 dated 23.04.2024 ceedings are set aside. posed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d s y 4 RASHMI 2024.12.19 16:57 I attest to the accuracy and integrity of this document

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