Case Law Details
Fastway Citizen Cable Network Pvt. Ltd. Vs DCIT (Punjab and Haryana High Court)
In the case of Fastway Citizen Cable Network Pvt. Ltd. Vs DCIT, the Punjab and Haryana High Court addressed the legality of tax notices issued under Section 148 of the Income Tax Act, 1961, and the subsequent proceedings. The matter involved notices issued by the Jurisdictional Assessing Officer (JAO) on 30.03.2023, which were challenged in the court. The court found that the notices and the related proceedings were contrary to the statutory provisions, particularly Section 144B of the Act, which mandates faceless assessments. This case had a strong link with two earlier decisions, Jasjit Singh Vs Union of India and Jatinder Singh Bhangu Vs Union of India, both of which had concluded that such circulars and instructions cannot override statutory provisions or make them redundant. The High Court held that while instructions and circulars can aid in the implementation of statutory provisions, they cannot contradict or supersede them, particularly when they affect taxpayers’ rights.
The court emphasized that notices issued without following the faceless assessment procedure under Section 144B of the Act, as prescribed in the Income Tax Act, were invalid. As a result, the court set aside the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, along with the order dated 30.03.2023. This decision affirmed the earlier rulings, ensuring that tax authorities follow the proper legal process while issuing notices. The court allowed the writ petition, ruling that all proceedings initiated under the disputed notices lacked jurisdiction. In conclusion, the court disposed of all pending applications and reaffirmed that the notices and proceedings under Section 148 were without merit due to the failure to follow mandatory statutory requirements.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. 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.”
2. 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 Jurisdictional Assessing Officer under Section 148 dated 30.03.2023(P -2) as well as the consequential proceedings are set aside.
3. All pending applications also stand disposed of accordingly.
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