HERO CYCLES LTD. V. PRINCIPAL COMMISSIONER OF INCOME TAX, LUDHIANA-1 AND ANOTHER

CWP/7968/2023

AI Insights

The case involves Hero Cycles Limited against the Principal Commissioner of Income Tax, Ludhiana, concerning the legality of certain orders and notices issued by the Income Tax Department. The petitioner challenged the final orders and demands raised by the respondents, which were allegedly passed in violation of the interim orders of the court and without following the proper procedural requirements under the Income Tax Act, 1961. The court examined the adherence to statutory provisions in the issuance of these orders and the subsequent actions taken by the tax authorities.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 768459 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 10-09-2024
• Assessment Year: misc
• Other Referred Cases: Jasjit Singh vs. Union of India, Jatinder Singh Bhangu vs. Union of India
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RANVIJAYSINGH
• Assessee Lawyers: ALOK MITTAL
• Keywords: Faceless assessment; Final order; Income Tax; Jurisdiction; Contempt of Courts Act, 1971
• Section: 148; 119; 144B; 120

Judgement Text

" 110+243 IN THE HIGH COURT OF PUNJAB AND HARYANA AT HERO CYCLES LIMITED PRINCIPAL COMMISSIONER OF INCOME TAX, LUDHIANA ANOTHER CORAM: HON'BLE MR. JUSTICE HON'BLE MR Present: Mr. Mr. for the respondent. *** SANJEEV PRAKASH SHARMA CM-9208-CWP 1. Having regard to the reasons mentioned in the application filed by the petitioner, the same is allowed and document is taken on Annexure A-1. CWP-7968-2023 (O&M) 2. In 25.04.2023, which was duly served on the respondents, respondents have proceeded to pass final order demand and making additions, which has been 3. L involved in the present petition stands finally examined and concluded by this Court in India and others IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CM CWP Date of Decision: HERO CYCLES LIMITED PRINCIPAL COMMISSIONER OF INCOME TAX, LUDHIANA HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH Mr. Alok Mittal, Advocate for the Mr. Ranvijay Singh, Senior Standing Counsel, for the respondent. *** SANJEEV PRAKASH SHARMA, J. (Oral) CWP-2024 Having regard to the reasons mentioned in the application filed by the petitioner, the same is allowed and document is taken on 1. 2023 (O&M) In spite of the interim order passed by this Court in this case on which was duly served on the respondents, have proceeded to pass final order demand and making additions, which has been Learned counsel for both the parties involved in the present petition stands finally examined and concluded by 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 THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CM-9208-CWP-2024 in/and CWP-7968-2023 (O&M) Date of Decision: 10.09.2024 ..…...Petitioner V/s. PRINCIPAL COMMISSIONER OF INCOME TAX, LUDHIANA-1 AND ….....Respondents SANJEEV PRAKASH SHARMA SANJAY VASHISTH the applicant-petitioner. Ranvijay Singh, Senior Standing Counsel, Having regard to the reasons mentioned in the application filed by the petitioner, the same is allowed and document is taken on record as interim order passed by this Court in this case on which was duly served on the respondents, it is informed that the have proceeded to pass final order dated 22.03.2024 raising demand and making additions, which has been taken on record today itself. parties are ad idem that the issue involved in the present petition stands finally examined and concluded by titled as Jasjit Singh vs. Union of , decided on 29.07.2024, and by the Coordinate Bench in 1 AND s Having regard to the reasons mentioned in the application filed record as interim order passed by this Court in this case on it is informed that the raising that the issue involved in the present petition stands finally examined and concluded by titled as Jasjit Singh vs. Union of in Suresh Kumar 2024.09.13 16:52 I attest to the accuracy and integrity of this document CWP-7968-2023 (O&M) CWP No.15745 of 2024 titled as Jatinder Singh Bhangu vs. Union of India and others, decided on 19.07.2024. 4. This Court i “ 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 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 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 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 2023 (O&M) Page 2 of 4 CWP No.15745 of 2024 titled as Jatinder Singh Bhangu vs. Union of India , decided on 19.07.2024. This Court in Jasjit Singh (supra) held “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 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 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 CWP No.15745 of 2024 titled as Jatinder Singh Bhangu vs. Union of India (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 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 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 18. Keeping in view the law laid down by the Coordinate Bench (supra), notices issued by the JAO under Section 148 CWP No.15745 of 2024 titled as Jatinder Singh Bhangu vs. Union of India Suresh Kumar 2024.09.13 16:52 I attest to the accuracy and integrity of this document CWP-7968-2023 (O&M) of the Act, 1961 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the A 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 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 wit order.” 5. Keeping in view above, we aforesaid terms. The observations and order passed above shall apply mutandis to the present case. Accordingly, 17.03.2023, 29.03.202 Another order dated 22.03.2024 passed during the pendency of this writ petition based on the notice issued under Section 148 of the Act, therefore, is also set aside. 6. We find that the contents of the CM to that the final order dated 22.03.2024 has been passed by the respondent Assessment Unit, Income Tax Department, interim order of this Court dated 25.04.2023 2023 (O&M) Page 3 of 4 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 wit order.” Keeping in view above, we allow aforesaid terms. The observations and order passed above shall apply to the present case. Accordingly, impugned order(s)/ 17.03.2023, 29.03.2023 passed/issued by the respondents are Another order dated 22.03.2024 passed during the pendency of this writ petition based on the notice issued under Section 148 of the Act, therefore, is also set aside. We find that the contents of the CM to that the final order dated 22.03.2024 has been passed by the respondent Assessment Unit, Income Tax Department, interim order of this Court dated 25.04.2023, of the Act, 1961 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged ct, 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 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 allow this Writ Petition in the aforesaid terms. The observations and order passed above shall apply mutatis impugned order(s)/ notice(s) dated 3 passed/issued by the respondents are set aside. Another order dated 22.03.2024 passed during the pendency of this writ petition based on the notice issued under Section 148 of the Act, therefore, is We find that the contents of the CM to be correct to the extent that the final order dated 22.03.2024 has been passed by the respondent – Assessment Unit, Income Tax Department, though it is in violation of the whereby we have restrained the this Writ Petition in the mutatis dated set aside. Another order dated 22.03.2024 passed during the pendency of this writ petition based on the notice issued under Section 148 of the Act, therefore, is be correct to the extent – in violation of the we have restrained the Suresh Kumar 2024.09.13 16:52 I attest to the accuracy and integrity of this document CWP-7968-2023 (O&M) respondents from passing the final order. While we have decided the present writ petition in terms of the judgment in issue notice to the concerned officer, who has passed the order dated 22.03.2024 to explain his conduct issuance of notice, Section 12 of the Contempt of Courts Act, 1971, be not initiated against him. For the said purpose, the Registry September 10 Ess Kay Whether speaking / reasoned Whether Reportable 2023 (O&M) Page 4 of 4 dents from passing the final order. While we have decided the present writ petition in terms of the judgment in Jasjit Singh issue notice to the concerned officer, who has passed the order dated 22.03.2024 to explain his conduct within a period of 15 days from the date of issuance of notice, as to why the contempt proceedings Section 12 of the Contempt of Courts Act, 1971, be not initiated against him. For the said purpose, the Registry is directed to issue [SANJEEV September 10, 2024 Whether speaking / reasoned : Whether Reportable : dents from passing the final order. While we have decided the present Jasjit Singh (supra), we propose to issue notice to the concerned officer, who has passed the order dated within a period of 15 days from the date of as to why the contempt proceedings within the meaning of Section 12 of the Contempt of Courts Act, 1971, be not initiated against him. is directed to issue notice to him. [SANJEEV PRAKASH SHARMA] JUDGE [SANJAY VASHISTH] JUDGE Yes / No Yes / No dents from passing the final order. While we have decided the present we propose to issue notice to the concerned officer, who has passed the order dated within a period of 15 days from the date of within the meaning of Section 12 of the Contempt of Courts Act, 1971, be not initiated against him. PRAKASH SHARMA] Suresh Kumar 2024.09.13 16:52 I attest to the accuracy and integrity of this document "