Ishwar Chand Vs Union of India (Punjab and Haryana HC)
In the case of Ishwar Chand vs Union of India, the Punjab and Haryana High Court ruled that instructions or circulars issued by the Central Board of Direct Taxes (CBDT) cannot override statutory provisions outlined in the Income Tax Act, 1961. The petitioner challenged the validity of notices issued under Section 148 of the Act by the Jurisdictional Assessing Officer (JAO) for reassessment purposes. The court referred to two previous cases—Jasjit Singh vs Union of India and Jatinder Singh Bhangu vs Union of India—both of which dealt with similar issues of CBDT circulars and reassessment notices.
In the earlier judgments, the court held that CBDT circulars could only supplement statutory provisions, not supersede them. The court emphasized that legislative provisions, especially those with financial implications, must be strictly adhered to. It was observed that any circulars or instructions aimed at bypassing the statutory framework would cause undue hardship to taxpayers and create confusion. The court reaffirmed the view that reassessment notices issued without following the proper faceless assessment procedures under Section 144B of the Income Tax Act were void for lack of jurisdiction.
In line with these precedents, the court allowed the writ petition filed by Ishwar Chand, setting aside the reassessment notices dated 31.08.2024 and related proceedings. The court also granted the Income Tax Department the liberty to initiate fresh proceedings in accordance with the proper legal framework. The ruling reaffirms that administrative instructions cannot be used to undermine statutory provisions, ensuring that tax laws are implemented as intended by the legislature.
