Case Law Details
Sai Vinayakka Education Society Through Ashwani Sood Vs ACIT (Punjab and Haryana High Court)
In the case of Sai Vinayakka Education Society Through Ashwani Sood Vs ACIT, the Punjab and Haryana High Court addressed the validity of notices issued under Section 148 of the Income Tax Act. The court highlighted that the Income Tax Department failed to conduct faceless assessments as mandated by Section 144B of the Act before issuing such notices. This decision aligns with prior judgments in similar cases, notably Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India, where it was established that circulars and instructions from the Board should not override statutory provisions or create confusion among taxpayers. The court emphasized the necessity of adhering to the legal framework in tax assessments and stated that the authorities could not modify legal provisions for their convenience.
As a result of this ruling, the court set aside the notices issued by the Jurisdictional Assessing Officer on March 16, 2024, along with all related proceedings for lack of jurisdiction. The judgment reiterates the importance of following established procedures within the Income Tax Act and provides the Income Tax Department the opportunity to proceed appropriately under the law if they choose to do so. This ruling underscores the judiciary’s role in ensuring that administrative actions comply with statutory requirements, thus protecting taxpayer rights against arbitrary decisions.
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 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 16.03.2024 (Annexure P-1) 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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