Case Law Details
Vipin Kumar Gupta Vs ITO (Punjab and Haryana High Court)
The Punjab and Haryana High Court, in the case of Vipin Kumar Gupta vs. ITO, addressed the validity of proceedings initiated under Section 148 of the Income Tax Act, 1961, without adhering to the faceless assessment mechanism mandated under Section 144B. The Court relied on its earlier judgments, including the case of Jasjit Singh vs. Union of India, decided on July 29, 2024, where it was held that circulars or instructions issued by the Central Board of Direct Taxes (CBDT) cannot override or dilute statutory provisions. The High Court emphasized that legislative enactments, especially those with financial implications, must be strictly and mandatorily followed.
In the Jasjit Singh case, the Court had ruled that notices issued and proceedings initiated without conducting faceless assessments under Section 144B were contrary to the Income Tax Act’s provisions. Consequently, such notices and orders were deemed invalid for lack of jurisdiction. The Court reiterated that while CBDT circulars can supplement statutory provisions, they cannot replace or render them obsolete. Tax authorities were directed to comply with statutory mandates to ensure fairness and avoid confusion among taxpayers.
Applying the principles established in Jasjit Singh, the Court set aside the notice dated March 15, 2024, and all consequential proceedings initiated by the Jurisdictional Assessing Officer under Section 148 of the Act. It granted liberty to the revenue authorities to proceed afresh in compliance with the prescribed procedures under the Income Tax Act. This judgment underscores the judiciary’s insistence on adherence to procedural mandates, safeguarding taxpayers’ rights against arbitrary actions by tax authorities.
All related applications in the case were also disposed of in line with the judgment. The decision reaffirms the significance of faceless assessment as a statutory requirement, ensuring transparency and fairness in tax proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. Notice of motion.
2. Varun Issar‘ Senior Standing Counsel‘ accepts notice on behalf of the respondents/Income Tax Department.
3. Both the counsel are ad idem that the issue involved in the present petition stands finally examined and concluded by this Court in CWP No .21509 of 2023 titled as Jasjit Singh vs. Union of India and others‘ decided on 29.07.2024‘ and by the Coordinate Bench in CWP No.15745 of decided on 19.07.2024. This Court in Jasjit Singh (supra) held as under:
“16. We are in agreement with the view taken by the Coordinate Bench and hold that such circular instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having financial implications are required to be followed strictly and mandatorily. By exercising the owners pcontained in Sections 119 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.”
4. 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 dated 15.03.2024 (Annexure P-2) issued by the Jurisdictional Assessing Officer u/s 148 of the Income Tax Act 1961 and all consequential proceedings are set aside.
5. All pending applications also stand disposed of accordingly.
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