Case Law Details
Bhartiya Cottex Vs Union of India (Punjab and Haryana High Court)
In the case of Bhartiya Cottex Vs Union of India, the Punjab and Haryana High Court addressed the legality of notices issued under Section 148 of the Income Tax Act, 1961, without conducting the mandated faceless assessment under Section 144B. The court found the notices and subsequent proceedings initiated by the Jurisdictional Assessing Officer to be without jurisdiction because they were issued without conducting the required faceless assessment under Section 144B of the Income Tax Act, 1961. The court referenced earlier rulings in Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, which clarified that the authorities could not override statutory provisions with circulars or internal instructions. These earlier judgments established that legislative enactments with financial implications must be followed strictly, and the failure to conduct the faceless assessment violated the mandated procedure outlined in the Act. Consequently, the notices were deemed invalid, as they did not adhere to the legal requirements necessary for jurisdictional legitimacy. As a result, the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 31.08.2024 were annulled. The court allowed the writ petition and dismissed all pending applications, reinforcing the requirement for the authorities to follow established legal procedures in their assessments.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. Notice of motion.
2. Gauri Neo Rampal, 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 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 11 9 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 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, notices issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961 dated 31.08.2024 (Annexure P-3) and consequential proceedings are set aside.
5. All pending applications also stand disposed of accordingly.
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