Administrative circulars cannot override statutory rules; CBDT power under Section 119 cannot amend the Second Schedule.

A CBDT circular issued under Section 119 of the Income-tax Act could not amend Rule 68B of the Second Schedule, because that Rule formed part of the statutory scheme and had legislative force. The Board's administrative power under Section 119 could not override or modify provisions with statutory effect, and any such attempt was beyond jurisdiction and ultra vires. On that basis, the circular was treated as invalid and the challenge to the High Court's view failed.

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Issues: Whether a CBDT circular issued under Section 119 of the Income-tax Act, 1961 could amend the provisions of Rule 68B of the Second Schedule to the Income-tax Act, 1961 and thereby alter provisions having statutory force.

Analysis: A circular issued by the CBDT under Section 119 cannot override or amend statutory provisions contained in the Second Schedule. Rule 68B forms part of the statutory scheme and has legislative force. Any attempt by the Board, in exercise of administrative power, to modify such provisions is beyond the authority conferred by Section 119 and is ultra vires.

Conclusion: The circular was ultra vires and rightly quashed.

Final Conclusion: The challenge to the High Court's decision failed, and the appeal stood dismissed.

Ratio Decidendi: An administrative circular cannot amend or override statutory provisions having legislative force, even if issued under Section 119 of the Income-tax Act, 1961.

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