Case Law Details
Shikhar Gadh Vs ITO (Punjab and Haryana High Court)
In the case of Shikhar Gadh vs Income Tax Officer (Punjab and Haryana High Court), the court addressed a writ petition challenging the validity of a notice issued under Section 148 of the Income Tax Act, 1961. The court referenced its prior rulings in Jasjit Singh vs Union of India and Jatinder Singh Bhangu vs Union of India, which emphasized that statutory provisions with financial implications must be strictly adhered to. It was held that instructions or circulars issued by the tax authorities cannot override legislative enactments. Specifically, the court reiterated that assessments under Section 148 must comply with the faceless assessment procedure mandated by Section 144B of the Act. Non-compliance with these statutory provisions renders such notices and subsequent proceedings invalid. Consequently, the court set aside the notice dated August 30, 2024, issued by the Jurisdictional Assessing Officer (JAO), along with all related proceedings, for lack of jurisdiction. However, the court clarified that the revenue authorities retain the liberty to proceed afresh by following the prescribed procedures under the Act. All pending applications associated with the case were disposed of in light of this ruling. This judgment reinforces the necessity for tax authorities to adhere strictly to statutory requirements and procedures in issuing notices and conducting assessments.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. Notice of motion.
2. Mr. Saurabh Kapoor, respondent/Revenue
3. Both the counsel are accepts notice on behalf of 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 dated 30.08.2024 issued under Section 148 of the Income Tax Act, 1961 by Jurisdictional Assessing Officer as well as the consequential proceedings are set aside.
5. All pending applications also stand disposed of accordingly.
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