In a recent case, the High Court of Punjab & Haryana set aside Income Tax Notice issued and proceedings initiated without conducting faceless assessment under section 144 B of the Income Tax Act, 1961.
Shikhar Gadh, the petitioner stated that the issue involved in the present petition stands finally examined and concluded by the Court titled as Jasjit Singh vs. Union of India and others and by the Coordinate Bench in Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024.
In the case, the court held 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.
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Keeping in view the law laid down by the Coordinate Bench, the division bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth observed that the 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.
The court set aside the notices. The Court viewed that instructions and circulars can be issued only for the purpose of supplementing the statutory provisions and for their implementation.
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