Allowed

Pradeep Kumar Garg v. Income Tax Officer

Punjab & Haryana HC19 Dec 2024CWP/24807/2024

Case brief

AI extract

What is this about?

The High Court allowed a writ petition holding that a notice issued by the Jurisdictional Assessing Officer under Section 143(2) of the Income Tax Act, 1961 for AY 2023-24 was without jurisdiction because no Section 148 notice existed for that year. The Court quashed the notice.

What did the court decide?

The notice dated 18.06.2024 issued under Section 143(2) of the Act and proceedings initiated by the JAO are quashed and set aside.

Pradeep Kumar Garg Vs Income Tax Officer — Income Tax | Punjab & Haryana HC (2024)

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CWP-24807-2024 (O&M)

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Page 1 of 7

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103+208 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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CM-20488-CWP-2024 in/and CWP-24807-2024 (O&M) Date of Decision: 19.12.2024

PRADEEP K U MAR GARG

. . . . Petitione r

Vs.

INCOME T A X OFFICER

. . . . Responden t

****

CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH

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Present: M s. Radhika Suri, Sr. Advocate w ith M r. Prateek Gupta, Advocate M r. Abhinav Narang, Advocate M s. Parnika Singla, Advocate f or the petitioner.

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M r. Saurabh Kapoor, Sr. Standi n g Counsel with M s. Pridhi Sandhu, Jr. Standing C ounsel M s. Muskaan Gupta, Advocate f or the respondent/Revenue.

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SANJEEV PRAKASH SHARMA, J.(Oral)

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CM-20488-CWP-2024

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A pplication for placing on r e cord rejoinder on behalf o f petitioner al o ng with documents Annexu r e P-7 to P-12 and seekin g exemption fr o m filing certified copies there o f is allowed, subject to all jus t exceptions.

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R egistry to place the same at ap p ropriate place.

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CWP-24807-2024 (O&M)

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Learne d counsel for the petitioner s u bmits that as the last date i s 31.12. 2 024, the case may be taken up fo r arguments.

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MOHIT GOYAL 2024.12.19 17:16 I attest to the accuracy and integrity of this document

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CWP-24807-2024 (O&M)

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Page 2 of 7

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We, th e refore, have heard both the cou n sel finally on the case.

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The s u bmissions of learned counsel a ppearing for the petitioner ar e that th e petitioner had filed return f or the AY: 2023-24 which i s required to be assessed by the Natio n al Faceless Assessment Centr e (for sh o rt ‘NFAC’) in terms of Sectio n 144B of the Income Tax Act , 1961 ( f or short ‘the Act’).

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Learne d counsel submits that a noti c e was issued to the petitione r under section 143(2) of the Act for the AY:2023-24 by th e Jurisdi c tional Assessing Officer (JAO) , ITO Ward Sunam, whereas th e said n o tice was to be issued in terms of section 144B(1)(iii) of the Ac t by the N FAC, and therefore, she subm i ts that the impugned notice wa s withou t jurisdiction. The petitioner objected to the jurisdictio n assum e d by the JAO vide his objecti o ns dated 16.08.2024. The sam e were h o wever rejected by the JAO placing reliance on para 4(i) of th e CBDT ’ s Guidelines for compulsory s e lection of returns for complet e scrutin y during FY: 2024-25 vide instr u ctions dated 03.05.2024.

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Learne d counsel for the petitioner has invited attention to the Circula r dated 0 3.05.2024, and submits that as per clause 2(4) of the aforesai d guideli n es, the cases could be taken only where there is a notice issue d under s ection 148 of the Act for comp u lsory scrutiny. Since in the cas e of the p etitioner, there was no notice i ssued under section 148 of th e Act fo r the AY: 2023-24, the respond e nt’s action was clearly beyon d the provisions of the Circular dated 03.05.2024. She therefore submit s

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MOHIT GOYAL 2024.12.19 17:16 I attest to the accuracy and integrity of this document

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CWP-24807-2024 (O&M)

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Page 3 of 7

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that th e case of the petitioner would f all within the scope of the sai d circula r , and the assumption of jurisdiction by the JAO is therefore ba d in law.

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She also relies on the judgment passed by this Court in CWP No.21509 of 2023 titled as Jasjit Singh vs. Union of India and others , decide d on 29. 0 7.2024.

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Per co n tra, learned counsel appearing for the respondent submits tha t the IT R filed by the petitioner for AY: 2023-24 falls within th e jurisdi c tion of respondent/ITO, Ward Sunam, who has issued notic e under section 143(2) of the Act, a nd the concerned officer ha d jurisdi c tion in terms of the CBDT Gui d elines for compulsory selectio n of retu r ns for complete scrutiny during FY: 2024-25.

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The guidelines were circulated vide in s tructions dated 03.05.2024, an d as per para 2(4)(i) of these guidelines, notice shall be issued unde r section 143(2) of the Act in a case w h ere notice under section 148 o f the Ac t has been issued pursuant to s e arch and seizure/survey action s condu c ted on or after 1^st day of Ap r il, 2021, and also cases wher e return i s either furnished or not furnis h ed in response to notice unde r section 148 of the Act.

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Learne d counsel for the Revenue sub m its that the petitioner had no t filed r e turns in response to notice und e r section 148 of the Act issue d to him on 30.03.2024 with respect to AYs: 2020-21, 2021-22 an d 2022-23. In view thereto, the case of the petitioner even for the AY :

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MOHIT GOYAL 2024.12.19 17:16 I attest to the accuracy and integrity of this document

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CWP-24807-2024 (O&M)

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Page 4 of 7

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2023-2 4 would fall under the conditions of the aforesaid instructions , and th e issuance of notice under sectio n 143(2) of the Act is as per law.

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The i m pugned notice was issued b y the JAO on 18.06.2024 afte r taking proper administrative approval of the Principal Commissione r of Inc o me Tax vide order dated 14.06.2024, and therefore he submit s that th e impugned notice cannot be s a id to have been issued withou t jurisdi c tion.

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We h a ve carefully considered the submissions and perused th e provisi o ns of law. Section 144B(1) of t h e Act provides as under:

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“144B(1) Notwithstanding a nything to the contrary c ontained in any other provi s ion of this Act, the a ssessment, reassessment or rec o mputation under sub- s ection (3) of section 143 or und e r section 144 or under s ection 147, as the case may be, w ith respect to the cases r eferred to in sub-section (2), sha l l be made in a faceless m anner as per the following proce d ure, namely:-

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iii) a notice shall be served o n the assessee, through t h e National Faceless Assessme n t Centre, under sub- s ection (2) of section 143 or u n der sub-section (1) of s ection 142 and the assessee may f ile his response to such n otice within the date specified t herein, to the National F aceless Assessment Centre which shall forward the same t o the assessment unit;”

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In vie w of above, it is apparent that th e notice under section 143(2) fo r assess m ent under section 144B woul d be issued through the NFAC ,

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MOHIT GOYAL 2024.12.19 17:16 I attest to the accuracy and integrity of this document

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CWP-24807-2024 (O&M)

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Page 5 of 7

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and th e assessee would file a respons e to such notice within the dat e specifi e d therein.

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After t he Faceless Assessment Schem e was introduced by amendmen t in the A ct through new regime, the jur i sdiction has been ceased for th e purpos e of issue of notice under secti o n 148, and it is only in specia l circum s tances as provided under se c tion 144B(7) and (8) that th e concer n ed Principal Commissioner o f Income Tax may direct fo r issuan c e of notice.

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The c i rcumstances as mentioned in s ection 144B(7) and (8) woul d only b e where a notice under section 148 has already been issued. Th e CBDT Guidelines with respect to the power of issuance of notice b y the JA O would arise only in terms ther e to.

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On p e rusal of para 2(4)(i) of the C ircular dated 03.05.2024, it i s appare n t that the proceedings for scr u tiny by the JAO can be picke d up, an d notice can be issued under se c tion 143(2) only in cases wher e notice u nder section 148 has been issu e d for that particular assessmen t year. I t is an admitted position from t h e reply filed by the responden t that notice under section 148 was iss u ed for AYs: 2020-21, 2021-2 2 and 20 2 2-23, and was not issued for the AY: 2023-24. In view thereto , the JAO would not have jurisdictio n to issue notice under sectio n 143(2) of the Act, and it would be o nly the NFAC as per sectio n 144B( 1 )(iii) to have jurisdiction to in i tiate proceedings under sectio n 143(2) of the Act.

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MOHIT GOYAL 2024.12.19 17:16 I attest to the accuracy and integrity of this document

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CWP-24807-2024 (O&M)

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Page 6 of 7

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The n o tice dated 18.06.2024 issued u n der section 143(2) of the Act i s therefo r e found to be without jurisdicti o n. Merely taking approval fro m the co n cerned Principal Commissioner would not be sufficient to gran t jurisdi c tion to the JAO.

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In Jasjit Singh (supra), we have held a s under:

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“16. We are in agreement w i th the view taken by the C oordinate Bench and hold t h at such circular or i n structions by the Board could n ot have been issued to o verride statutory provisions or t o make them otiose or o bsolete. Legislative enactme n ts having financial i m plications are required to be followed strictly and m andatorily. By exercising the powers contained in S ections 119 and 120 of the Act, 1 961 as well as Section 1 44B (7 & 8), the authorities can n ot be allowed to usurp t h e legal provisions to their own satisfaction and c onvenience causing hardship to the assessees. It also l e aves confusion in the minds o f the taxpayers. In the o pinion of this Court, instruction s and circulars can be i s sued only for the purpose of sup p lementing the statutory p rovisions and for their implement a tion.

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17. In view of the aforesai d discussion, there is no o ccasion to distinguish or tak e a different view as s uggested by the learned counsel f o r the revenue from what h as already been held by the Coor d inate Bench.

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18. Keeping in view the law laid down by the C oordinate Bench (supra), notices i ssued by the JAO under S ection 148 of the Act, 1961 and t h e proceedings initiated t h ereafter without conducting the faceless assessment as e nvisaged under Section 144B of t h e Act, 1961, have been fo und to be contrary to the provisi o ns of the Act, 1961 and a ccordingly notices dated 2 8 .02.2023, 16.03.2023,

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MOHIT GOYAL 2024.12.19 17:16 I attest to the accuracy and integrity of this document

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CWP-24807-2024 (O&M)

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Page 7 of 7

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2 0.03.2024 and 30.03.2023 and o rder dated 30.03.2023, a re set aside for want of jurisdictio n .

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19. The respondents-revenu e would be, however, at liberty to follow the procedure as l a id down under the Act, 1 961 and proceed accordingly, if s o advised. 20. All the writ petitions a r e allowed. The interim o rder passed by the Court shall stand merged with the p resent order.”

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In vie w thereto, the petition deserves to be allowed. The notice date d 18.06. 2 024 issued under section 143 ( 2) of the Act and proceeding s initiate d by the JAO cannot be h e ld to be sustainable in law . Accor d ingly, the same quashed and set aside. Consequence to follow.

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Writ Petition stands allowed accordin g ly.

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All pe n ding applications also stand di s posed of.

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(SANJEEV PRAKASH SHARMA) JUDGE

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(SANJAY VASHISTH) JUDGE

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December 19, 2024

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Mohit goyal

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1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No

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MOHIT GOYAL 2024.12.19 17:16 I attest to the accuracy and integrity of this document

Pradeep Kumar Garg v. Income Tax Officer

Case brief

What is this about?

What did the court decide?

Pradeep Kumar Garg v. Income Tax Officer

Case brief

What is this about?

What did the court decide?

What the court decided

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