SHIVANI JAIN vs. INCOME TAX OFFICER, LUDHIANA

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CWP/7099/2024HC Punjab & HaryanaPHHC01039604202403 October 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 JAO under Section 148 of the Income Tax Act, 1961, and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, are contrary to the provisions of the Act. The court agreed with the view taken by the Coordinate Bench that circulars or instructions by the Board cannot override statutory provisions or make them obsolete. Statutory enactments having financial implications are mandatorily required to be followed strictly. The court reasoned that by exercising powers under Sections 119 and 120 of the Act, 1961, as well as Section 144B (7 & 8), authorities cannot usurp legal provisions to their own satisfaction and convenience, causing hardship to assessees and confusion. Instructions and circulars can only supplement statutory provisions and aid in their implementation. Consequently, the notices dated 29.03.2023 and all consequential proceedings were set aside for want of jurisdiction. The respondents-revenue were granted liberty to follow the procedure laid down under the Act, 1961, if so advised. The court noted that the interim order stood merged with the present order.

What were the facts?

The petitioner, Shivani Jain, filed a writ petition before the Punjab and Haryana High Court challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The revenue contended that these notices and proceedings were valid. The High Court noted that the issue was identical to those decided in previous writ petitions, specifically CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) and CWP No. 1574 of 2024 (Jatinder Singh Bhangu vs. Union of India and others). The court was asked to determine if the notices and proceedings initiated without conducting faceless assessment under Section 144B were valid.

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, 1961, are contrary to the provisions of the Act, 1961. (Question of law and mixed fact). Assessee's Contention: The assessee argued, by relying on the decisions in Jasjit Singh and Jatinder Singh Bhangu, that circulars and instructions issued by the Board cannot override statutory provisions or render them otiose. They contended that financial implications require mandatory adherence to statutory provisions, and authorities cannot usurp legal provisions for their convenience, causing hardship and confusion. Instructions and circulars can only supplement statutory provisions. Revenue's Contention: The revenue suggested that there might be grounds to distinguish the present case from the precedents relied upon by the assessee.

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

242.5 I Shivani Jain

Income Tax O

CORAM: H

Present M

SANJEEV P 1.

L issue involved by this Court India and oth CWP No.1574 and others, de under: “ B c m f m IN THE HIGH COURT OF PUN AT CHANDIGA C D

Vs. Officer

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Sunil K. Mukhi, Advocate fo (through video conferencing) Mr. Ranvijay Singh, Sr. Standing ***

RAKASH SHARMA, J.(Oral) Learned counsel for the parties d in the present petition stands f in CWP No.21509 of 2023 title hers, decided on 29.07.2024, an 745 of 2024 titled as Jatinder Sin ecided on 19.07.2024. This Cour “16. We are in agreement with th Bench and hold that such circul could not have been issued to ove make them otiose or obsolete. financial implications are requi mandatorily. By exercising the po NJAB AND HARYANA ARH CWP-7099-2024 (O&M) Date of Decision: 03.10.2024

…Petitioner

…Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH or the petitioner. g Counsel for the revenue.

) are ad idem that the substantial finally examined and concluded ed as Jasjit Singh vs. Union of nd by the Coordinate Bench in ngh Bhangu vs. Union of India rt in Jasjit Singh (supra) held as he view taken by the Coordinate lar or instructions by the Board erride statutory provisions or to Legislative enactments having ired to be followed strictly and owers contained in Sections 119

l d f n a s e d

g d 9 RAJESH KUMAR 2024.10.04 09:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2]

CWP-7099-2024 (O&M)

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. 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.”

RAJESH KUMAR 2024.10.04 09:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3]

CWP-7099-2024 (O&M)

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 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, dated 29.03.2023 and all consequential proceedings are set aside. 3.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 03.10.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No

RAJESH KUMAR 2024.10.04 09:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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