RUCHI SETH vs. INCOME TAX OFFICER AND OTHERS

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CWP/8998/2025HC Punjab & HaryanaPHHC01050358202528 March 2025Bench: MR. JUSTICE ARUN PALLI,MRS. JUSTICE SUDEEPTI SHARMA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, acknowledging that the issue raised by the petitioner was covered by its previous decisions in Jatinder Singh Bhangu and Jasjit Singh cases, disposed of the writ petition. In those prior judgments, the writ petitions were allowed on similar grounds, granting liberty to the revenue to follow the prescribed procedure under the Act and proceed accordingly if advised. Since an appeal was pending before the Appellate Authority in the present case, the High Court directed the Appellate Authority to decide the petitioner's appeal in terms of the aforementioned judgments. The operative direction was to the Appellate Authority to decide the pending appeal in line with the High Court's prior rulings on the validity of Section 148 notices issued contrary to the CBDT circular.

What were the facts?

The petitioner, Ruchi Seth, challenged a notice dated 15.03.2024 under Section 148 of the Income Tax Act, 1961, an assessment order dated 18.10.2024 under Section 147, a demand notice dated 18.10.2024, and a penalty notice dated 18.10.2024 under Section 274, all pertaining to Assessment Year 2020-2021. The petitioner argued that the issues were covered by previous judgments of the High Court in Jatinder Singh Bhangu and Jasjit Singh cases. The petitioner also stated that an appeal was pending before the Appellate Authority. The revenue did not dispute the petitioner's contentions. The High Court noted that the challenge was based on a CBDT circular dated 29.03.2022, which stipulated that the National Faceless Assessment Centre (NFAC) has exclusive power to issue Section 148 notices.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, and subsequent assessment and penalty proceedings for AY 2020-2021 are invalid, considering the CBDT circular dated 29.03.2022 which vests exclusive power to issue such notices with the NFAC. Assessee's Contentions: - The issue is covered by the judgments of this Court in Jatinder Singh Bhangu vs. Union of India and others (CWP No. 15745-2024) and Jasjit Singh vs. Union of India and others (CWP No. 21509-2023). - The petitioner has preferred an appeal before the Appellate Authority, which is pending. Revenue's Contentions: - The revenue did not dispute the petitioner's contentions.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 274

AI-generated summary — verify with the full judgment below

CWP-8998-2025 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 184 CWP-8998-2025 (O&M) Date of Decision:-28.03.2025 Ruchi Seth ....Petitioner Vs. Income Tax Officer, Ward 6 (1), Chandigarh & ors. ...Respondents CORAM: HON'BLE MR. JUSTICE ARUN PALLI HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: Mr. Umang Goyal, Advocate for the petitioner Mr. Vaibhav Gupta, Standing counsel for the respondent. *** SUDEEPTI SHARMA, J. 1. Challenge in the present petition is to notice dated 15.03.2024 issued under Section 148 of the Income Tax Act, 1961 (for short ‘Act 1961”); impugned assessment order dated 18.10.2024 issued under Section 147 of the Act, 1961, demand notice dated 18.10.2024; penalty notice dated 18.10.2024 issued under Section 274 of the Act, 1961, and all consequential actions, for AY 2020-2021. 2. Learned counsel for the petitioner contends that the issue involved in the above 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. Learned counsel for the petitioner has further submitted that the petitioner has preferred an appeal and the same is pending before the Appellate Authority. Gaurav Arora 2025.04.03 15:21 I attest to the accuracy and integrity of this document

CWP-8998-2025 2 3. Learned counsel appearing for Union of India has also not 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 15.03.2024 issued under Section 148 of the Act, 1961; impugned assessment order dated 18.10.2024 issued under Section 147 of the Act, 1961, demand notice dated 18.10.2024; penalty notice dated 18.10.2024 issued under Section 274 of the Act, 1961, and all consequential actions, for AY 2020-2021, 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. Since in the present case, the appeal is pending before the Appellate Authority, the writ petition is disposed of with a direction to the Appellate Authority to decide the appeal of the petitioner, in terms of the judgments mentioned above. 8. All the pending applications, if any, also stand disposed of. (ARUN PALLI) (SUDEEPTI SHARMA) JUDGE JUDGE 28.03.2025

Gaurav Arora

Whether speaking/reasoned : Yes/No Whether reportable : Yes/No Gaurav Arora 2025.04.03 15:21 I attest to the accuracy and integrity of this document

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