SURENDER SINGH DESWAL,PANCHKULA V. DY. COMMISSIONER OF INCOME TAX, CIRCLE, PKL, PANCHKULA

ITA 672/CHANDI/2025

AI Insights

The case involves Shri Surender Singh Deswal, the appellant, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which upheld the addition made by the Assessing Officer under Section 69 of the Income Tax Act. The addition was made following the reopening of the appellant's case, which was initially assessed for the year 2016-17. The reopening was based on the ground that the appellant had advanced a loan to M/s GLM Infratech Ltd., and the Jurisdictional Assessing Officer issued a notice under Section 148, which was contested for being issued by the wrong authority. The Income Tax Appellate Tribunal found that the notice should have been issued by the Faceless Assessing Officer as per the recent amendments and notifications, and not by the Jurisdictional Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 778557 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 07-05-2025
• Other Referred Cases: Jatinder Singh Bhangu (165 Taxmann.com 115)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: ASHOK GOYAL LD
• Section: 147; 148; 69

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.672/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2016-17) Shri Surender Singh Deswal 1411, Sector 21 Panchkula-134112 बनाम/ Vs. DCIT-Circle Panchkula Sector-2 Panchkula-134112 ˕ायीलेखासं./जीआइआरसं./PAN/GIR No. ADSPD-1925-A (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Ashok Goyal (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr. Ranjit Kaur (Addl.CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 08-10-2025 घोषणाकीतारीख /Date of Pronouncement : 13/10/2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 11-04- 2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s.144 of the Act on 15-03-2024. 2. From the case records, it emerges that the assessee’s case was reopened on the ground that it advanced loan to M/s GLM Infratech Ltd. Printed from counselvise.com 2 To verify the creditworthiness, Jurisdictional Assessing Officer (JAO) of the assessee passed order u/s 148A(d) on 30-03-2023 and issued notice u/s 148 on the same very day. In the assessment order, Ld. AO made addition u/s 69 for Rs.54.83 Lacs. The Ld. CIT(A) upheld the addition against which the assessee is in further appeal before us. 3. The Ld. AR raised pertinent legal ground to state that reopening was bad-in-law and in derogation of the provisions of Sec.151A read with CBDT Notification no.18/2022 dated 29-03-2022 which mandate issuance of such notice by Faceless Assessing Officer (FAO) only. The Ld. AR asserted that in terms of ratio of various decisions of jurisdictional High Court, issuance of notice u/s 148 by Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO) would vitiate the assessment proceedings. The Ld. Sr. DR opposed admission of any such ground at this stage of proceedings. 4. The undisputed fact that emerges is that notice u/s 148 has been issued on 30-03-2022 by Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO). This notice, in terms of notification of the Central Government dated 29-03-2022 u/s 151A sub-section (1) and (2) of the Income Tax Act, was required to be issued by FAO. The failure to do so would vitiate the assessment proceedings as per the lead decision of Hon’ble High Court of Punjab & Haryana in the case of Jatinder Singh Bhangu (165 Taxmann.com 115), the substantive portion of which read as under: - 15. 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 Printed from counselvise.com 3 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. The respondents are heavily placing reliance upon office memorandum and letter issued by departmental authorities. It is axiomatic in tax jurisprudence that circulars, instructions and letters issued by Board or any other authority cannot override statutory provisions. The circulars are binding upon authorities and Courts are not bound by circulars. The mandate of Section 144B, 151A read with 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. 16. In the wake of above discussion and findings, we find it appropriate to subscribe view expressed by Bombay, Telangana and Gauhati High Court. The instant petitions deserve to be allowed and accordingly allowed. 17. The notices issued by Jurisdictional Assessing Officer under Section 148 are hereby quashed with liberty to respondent to proceed in accordance with procedure prescribed by law. Respectfully following the same, we would admit the additional ground and hold that the impugned notice as issued by JAO u/s 148 on 30-03- 2022 is liable to be quashed on this score only. We order so. Consequently, delving into other grounds has been rendered merely academic in nature. 5. The appeal stand allowed in terms of our above order. Order pronounced on 13/10/2025 Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 13/10/2025 Printed from counselvise.com 4 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "