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TMI Blog2024 (7) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... n of faceless assessment would be defeated if show cause notice u/s 148 is issued by Jurisdictional AO. 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 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. 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. - HON'BLE MR. JUSTICE SHEEL NAGU, CHIEF JUSTICE AND HON'BLE MR. JUSTICE JAGMOHAN BANSAL Present: - For the Petitioner : Mr. Sandeep Goyal, Advocate Mr. Rishab Singla, Advocate Mr. Peyush Pruthi, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it was mentioned that department has received information of escaping tax. The said officer 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 has further received intimation dated 21.06.2024 from the respondent to the effect that his case has been selected for the purpose of Faceless Assessment and proceedings would be conducted in a faceless manner. 4. The petitioner is assailing notice dated 28.03.2024 issued under Section 148 and intimation dated 21.06.2024 for assessment in accordance with the procedure prescribed under Section 144B of 1961 Act. 5. Mr. Sandeep Goyal, Advocate for the petitioner(s) submits that notice dated 28.03.2024 issued under Section 148 is in contravention of notification dated 29.03.2022 as well as Section 151A of 1961 Act whereby concept of Faceless Assessment has been introduced. A Division Bench of Telangana High Court in Kankanala Ravindra Reddy Vs. Income-Tax Officer (2023) 295 Taxman 652 (Telangana) , a Division Bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 148A (d) as well as the notice under section 148 of the Act could be issued by the local jurisdictional officer, rather than the faceless assessment. The issue in other words was whether was it not mandatory for the authorities concerned to initiate proceedings pertaining to re-assessment under section 148A and 148 of the Act in a faceless manner, (rather than being proceeded by the local jurisdictional officer), as is envisaged under section 144B as also under section 151A of the Act. 34. What is also relevant to take note of the fact that the Hon ble Supreme Court while exercising its power under Article 142 of the Constitution of India has also not relaxed the applicability of the Finance Act 2021. Rather, the Hon ble Supreme Court in very clear and unambiguous terms had held that the notices issued under the unamended provisions, which were struck down by the High Court, shall be treated as a notice under new amended provisions and the Union of India was directed to proceed further from that stage in terms of the amended provisions of law. In spite of such specific clear directions by the Hon'ble Supreme Court, the Union of India for reasons best known again proceede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Dutt, learned advocate appearing for the respondents submits that first of all the ground taken by the petitioner is hyper-technical since mode of service does not affect the contents and merit of the notice and secondly that the issuance of the aforesaid impugned notice under Section 148 of the Act is justifiable and sustainable in law in view of the office memorandum dated 20th February, 2023 being F No. 370153/7/2023-TPL issued by the CBDT and particularly paragraph 4 of the said office memorandum upon which she relies is quoted as hereunder: 4. It is also pertinent to note here that under the provisions of the Act both the JAO as well as units under NFAC have concurrent jurisdiction. The Ach does not distinguish between JAO or NFAC with respect to Jurisdiction over a case. This is further corroborated by the fact that under section 144B of the Act the records in a case are transferred back to the JAO as soon as the assessment proceedings are completed. So section 144B of the Act lays down the role of NFAC and the units under it for the specific purpose of conduct of assessment proceedings in a specific case in a particular Assessment Year. This cannot be construed to be mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd inapplicable to the issuance of notice under Section 148 of the Act. The Scheme is clearly applicable for issuance of notice under Section 148 of the Act and accordingly, it is only the FAO which can issue the notice under Section 148 of the Act and not the JAO. The argument advanced by respondent would render clause 3(b) of the Scheme otiose and to be ignored or contravened, as according to respondent, even though the Scheme specifically provides for issuance of notice under Section 148 of the Act in a faceless manner, no notice is required to be issued under Section 148 of the Act in a faceless manner. In such a situation, not only clause 3(b) but also the first two lines below clause 3(b) would be otiose, as it deals with the aspect of issuance of notice under Section 148 of the Act. Respondents, being an authority subordinate to the CBDT, cannot argue that the Scheme framed by the CBDT, and which has been laid before both House of Parliament is partly otiose and inapplicable. The argument advanced by respondent expressly makes clause 3(b) otiose and impliedly makes the whole Scheme otiose. If clause 3(b) of the Scheme is not applicable, then only clause 3(a) of the Scheme re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, when the Income Tax Authority proposes to take action against an assessee without following the due process of law, the said action itself results in prejudice to assessee. Therefore, there is no question of petitioner having to prove further prejudice before arguing the invalidity of the notice. 38 With respect to the Office Memorandum dated 20thFebruary 2023, the said Office Memorandum merely contains the comments of the Revenue issued with the approval of Member (L S) CBDT and the said Office Memorandum is not in the nature of a guideline or instruction issued under Section 119 of the Act so as to have any binding effect on the Revenue. Moreover, the arguments advanced by the Revenue on the said Office Memorandum dated 20th February 2023 is clearly contrary to the provisions of the Act as well as the Scheme dated 29 March 2022 . 39 With reference to the decision of the Hon'ble Calcutta High Court in Triton Overseas Private Limited (Supra), the Hon'ble Calcutta High Court has passed the order without considering the Scheme dated 29th March 2022 as the said Scheme is not referred to in the order. Therefore, the said judgment cannot be treated as a precedent or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice: Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section. Explanation 1. For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to in section 151. 151A. Faceless assessment of income escaping assessment. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or re-computation under section 147 or issuance of notice under section 148 or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability by (a) eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a team-based assessment, reassessment, recomputation or issuance or sanction of notice with dynamic jurisdiction. (2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment 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. 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 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 supplem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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