Object Of Introduction Of Faceless Assessment Gets Defeated If Show Cause Notice U/S 148 ITA Issued By Jurisdictional Assessing Officer: P&H High Court

The Punjab and Haryana High Court observed that the object of introduction of faceless assessment gets defeated if show cause notice under Section 148 of the Income Tax Act, 1961 (ITA) is issued by Jurisdictional Assessing Officer.

The Court observed thus in a batch of two civil writ petitions assailing the notice issued under Section 148 ITA and intimation for assessment in accordance with the procedure prescribed under Section 144B ITA.

A Division Bench of Chief Justice Sheel Nagu and Justice Jagmohan Bansal said, “From the perusal of Section 151A, it is quite evident that scheme of faceless assessment is applicable from the stage of show cause notice under Section 148 as well as 148A. Clause 3 (b) of notification dated 29.03.2022 issued under Section 151A clearly provides that scheme would be applicable to notice under Section 148. Even otherwise, it is a settled proposition of law that assessment proceedings commence from the stage of issuance of show cause notice. The object of introduction of faceless assessment would be defeated if show cause notice under Section 148 is issued by Jurisdictional Assessing Officer.”

Advocate Sandeep Goyal appeared for the petitioners while Standing Counsels Amanpreet Singh and Vaibhav Gupta appeared for the respondents.

In this case, the petitioner was an Income Tax Assessee and a farmer owning agriculture land. He for the assessment year 2020-2021, filed his Income Tax Return (ITR) and during the previous year, he had received compensation on account of acquisition of his land. He received a notice under Section 148 ITA from the Income Tax Officer (ITO) wherein it was mentioned that the department has received information of escaping tax. ITO proposed to re-assess petitioner’s returned income and informed that notice has been issued after obtaining prior approval from Principal Commissioner of Income Tax.

The petitioner was asked to file his return in the prescribed form within 94 days from the date of notice. He further received intimation to the effect that his case was selected for the purpose of Faceless Assessment and proceedings would be conducted in a faceless manner. The petitioner, therefore, challenged the said notice and intimation before the High Court.

The High Court in the above regard noted, “The respondent during the course of arguments vehemently and vigorously pleaded that notice under Section 148 can be issued by Jurisdictional Assessing Officer. In support of his contention, they heavily relied upon office memorandum dated 20.02.2023 and letter dated 19.01.2024 issued by Directorate of Income Tax (System).”

The Court emphasised that it is axiomatic intax jurisprudence that circulars, instructions and letters issued by Board or any other authority cannot override statutory provisions and the circulars are binding upon authorities and Courts are not bound by circulars.

“The mandate of Section 144B, 151A readwith notification dated 29.03.2022 issued thereunder is quite lucid. There is no ambiguity in the language of statutory provisions, thus, office memorandum or any other instruction issued by Board or any other authority cannot be relied upon. Instructions/circulars can supplement but cannot supplant statutory provisions”, it added.

Accordingly, the High Court allowed the petitions and quashed the notice.

Cause Title- Jatinder Singh Bhangu v. Union of India and Others (Neutral Citation: 2024:PHHC:090942-DB)

Appearance:

Petitioners: Advocates Sandeep Goyal, Rishab Singla, Peyush Pruthi, Aakriti, Nitish Bansal, and Nazuk Singhal.

Respondents: Standing Counsels Amanpreet Singh and Vaibhav Gupta.

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