RAJINDER KALSI vs. DEPUTY COMMISSIONER OF INCOME TAX AND OTHERS

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CWP/3947/2025HC Punjab & HaryanaPHHC01022249202513 February 2025Bench: MR. JUSTICE ARUN PALLI,MRS. JUSTICE SUDEEPTI SHARMA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition, disposing of it in terms of the judgments in Jatinder Singh Bhangu vs. Union of India and Jasjit Singh vs. Union of India. These prior judgments had allowed writ petitions on similar grounds, finding that the issuing authority lacked jurisdiction. The court granted liberty to the revenue to follow the prescribed procedure under the Income Tax Act, 1961, and proceed accordingly, if so advised. The principle established is that notices issued under Section 148 by authorities other than the designated NFAC, in contravention of CBDT circulars, are liable to be quashed. The operative direction was to quash the impugned notice and permit the revenue to re-initiate proceedings if they chose to do so following the correct procedure.

What were the facts?

The petitioner, Rajinder Kalsi, challenged a notice dated March 27, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2020-2021. The challenge was based on the assertion that the issuing authority lacked jurisdiction due to a CBDT circular dated March 29, 2022, which allegedly vested exclusive power to issue such notices in the National Faceless Assessment Centre (NFAC). The revenue, represented by the Dy. Commissioner of Income Tax and the Union of India, did not dispute the petitioner's contention regarding the applicability of prior judgments.

What were the issues?

1. Whether the notice dated March 27, 2024, issued under Section 148 of the Income Tax Act, 1961, for AY 2020-2021, is invalid due to lack of jurisdiction of the issuing authority, in light of CBDT circular dated March 29, 2022, which purportedly grants exclusive power to the NFAC to issue such notices? (Question of law and fact) Assessee's contention: The issuing authority lacked jurisdiction as per the CBDT circular dated March 29, 2022, which designates the NFAC with exclusive power to issue Section 148 notices. The petitioner relies on the judgments in Jatinder Singh Bhangu vs. Union of India and Jasjit Singh vs. Union of India. Revenue's contention: The revenue did not dispute the petitioner's contention or the applicability of the cited precedents.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

CWP-3947-2025 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 142 CWP-3947-2025 (O&M) Date of Decision:-13.02.2025 Rajinder Kalsi ....Petitioner Vs. Dy.Commissioner of Income Tax, Circle-I, International Taxation Chd & ors.

...Respondents CORAM: HON'BLE MR. JUSTICE ARUN PALLI HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: Mr. Nikhil Goyal, Advocate for the petitioner Ms. Urvashi Dhugga, Sr. Standing counsel for the respondent-Union of India. *** SUDEEPTI SHARMA, J. 1. Challenge in the instant writ petition is to notice dated 27.03.2024 issued under Section 148 of the Income Tax Act, 1961 (for short ‘Act 1961”), for AY 2020-2021. 2. Learned counsel for the petitioner contends that the issue involved in the present writ petition is covered by the judgment passed by a Co-ordinate Bench of this Court in the cases of Jatinder Singh Bhangu vs. Union of India and others, passed in CWP No. 15745-2024 and connected matter, decided on 19.07.2024 and Jasjit Singh vs. Union of India and others (CWP No. 21509-2023 and other connected matters), decided on 29.07.2024 . 3. Learned counsel appearing for Union of India has also not Gaurav Arora 2025.02.15 11:35 I attest to the accuracy and integrity of this document

CWP-3947-2025 2 disputed the same. 4. We have heard learned counsel for the parties and perused the whole records of the case. 5. The petitioner has challenged the notice dated 27.03.2024 issued under Section 148 of the Act, 1961, for AY 2020-2021, on the ground that the Issuing Authority had no jurisdiction to issue the same, in view of the circular/notification dated 29.03.2022 of the CBDT, wherein, it has been specifically enumerated that the NFAC has exclusive power to issue the notice under Section 148 of the Act, 1961. 6. A Co-ordinate Bench of this Court in Jatinder Singh Bhangu’s case (supra) and Jasjit Singh’s case (supra), allowed the writ petitions on the same issue, as raised in the present writ petition, by granting liberty to the revenue to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised. 7. In view of the above, the present writ petition is disposed of, in terms of Jatinder Singh Bhangu’s case (supra), decided on 19.07.2024 and Jasjit Singh’s case (supra), decided on 29.07.2024 8. All the pending applications, if any, also stand disposed of. (ARUN PALLI) (SUDEEPTI SHARMA) JUDGE JUDGE 13.02.2025

Gaurav Arora

Whether speaking/reasoned : Yes/No Whether reportable : Yes/No Gaurav Arora 2025.02.15 11:35 I attest to the accuracy and integrity of this document

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