Case Law Details
Anju Arora Vs Union of India and others (Punjab and Haryana High Court)
In the case of Anju Arora Vs Union of India and Others, the Punjab and Haryana High Court addressed the misuse of powers under Sections 119, 120, and 144B of the Income Tax Act, 1961 by the Central Board of Direct Taxes (CBDT). The petitioner challenged the issuance of notices and orders by the Jurisdictional Assessing Officer (JAO) under Sections 148A(b), 148A(d), and 148 of the Act, citing non-compliance with the statutory provisions for faceless assessments mandated under Section 144B.
The Court referred to earlier decisions in similar cases, including Jasjit Singh Vs Union of India and Others and Jatinder Singh Bhangu Vs Union of India and Others, which established that CBDT circulars or instructions cannot override legislative provisions. The judgment emphasized that financial laws must be strictly and mandatorily adhered to, and administrative actions should not cause unnecessary hardship or confusion for taxpayers. Circulars and instructions are meant to supplement and implement statutory provisions, not render them ineffective.
The Court found that the notices issued and subsequent proceedings initiated by the JAO were contrary to the Income Tax Act’s provisions. Consequently, the impugned notices and orders were set aside for lack of jurisdiction. However, the revenue authorities were granted liberty to follow the prescribed procedures under the Act and reinitiate proceedings if deemed necessary.
The High Court reiterated that legislative enactments with financial implications cannot be bypassed by administrative actions under Sections 119, 120, or 144B. The judgment serves as a reminder that procedural integrity and adherence to statutory mandates are crucial for maintaining fairness in tax administration.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. Notice of motion.
2. Ranvijay Singh, Sr. Standing Counsel, accepts notice for the respondents – revenue.
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 2024 titled as Jatinder Singh Bhangu vs. Union of India and others, 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 or 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 powers contained 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 issued by the Jurisdictional Assessing Officer u/s 148A(b) of the Income Tax Act, 1961, dated 21.03.2023, order issued u/s 148A(d) of the Act, dated 07.04.2023 and notice issued u/s 148 of the Act, dated 07.04.2023, as well as consequential proceedings are set aside.
5. All pending applications also stand disposed of accordingly.
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