Authority: High Court of Punjab and Haryana at Chandigarh

Order Date: 23 October 2024

Case Overview

  • Petitioner: Sameer Dalmia and Sons HUF (through its Karta, Sameer Dalmia)
  • Respondent: Principal Commissioner of Income Tax, Patiala, and others
  • Counsel: Mr. Rishabh Kapoor (petitioner), Mr. Ranvijay Singh, Senior Standing Counsel (respondent)
  • Bench: Hon'ble Mr. Justice Sanjeev Prakash Sharma, Hon'ble Mr. Justice Sanjay Vashisht
  • Reference Cases: Jasjit Singh vs. Union of India (decision 29‑07‑2024) and Jatinder Singh Bhangu vs. Union of India & others (decision 19‑07‑2024), both establishing that circulars or instructions cannot override statutory provisions.
  • Statutory Provisions Discussed: Sections 119 and 120 of the Income Tax Act, 1961; Section 144B(7 & 8) – faceless assessment; Section 148 – issuance of notice for reassessment.
  • Key Issue: Whether notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148, and subsequent proceedings, were valid despite not being conducted as faceless assessments under Section 144B, and whether circulars issued by the Board could supersede statutory provisions.
  • Court’s Reasoning: The Court reiterated that legislative enactments having financial implications must be followed strictly; circulars may only supplement, not supplant, statutory law. Notices dated 28‑02‑2023, 16‑03‑2023, 20‑03‑2024, and 30‑03‑2023, along with the order dated 30‑03‑2023, were found to be beyond the jurisdiction of the assessing officer because they bypassed the faceless assessment mechanism mandated by Section 144B.

Final Outcome

  • All notices issued under Section 148 of the Income Tax Act, 1961 on the dates mentioned above, and the consequential order dated 30‑03‑2023, are set aside for want of jurisdiction.
  • The respondents (Income Tax Department) are directed to follow the procedure laid down under the Act, 1961, if they wish to proceed further.
  • All pending applications in the present writ petition are disposed of accordingly.
  • The interim order previously passed by the Court stands merged with this final order.

Topics: Tax Law, Judicial Precedent