Facts of the Case

New Wave Realtors Private Limited filed writ petitions before the Delhi High Court challenging income-tax proceedings initiated pursuant to search and investigation actions conducted by the Department. Following the search, proceedings were initiated by the jurisdictional Assessing Officer, including the Income Tax Officer, Ward 18(3), Delhi, as well as authorities in the Central Circle in connected matters.

The petitioner sought quashing of the impugned notices on the ground that the proceedings were without jurisdiction and contrary to statutory provisions. The matter formed part of a large batch of connected petitions involving numerous entities and individuals arising from the same investigative exercise. The case was heard along with multiple related matters challenging similar notices issued by different jurisdictional officers.

 

 Issues Involved

  1. Whether reassessment or search-based proceedings initiated pursuant to investigation were valid in law.
  2. Whether notices issued by jurisdictional Assessing Officers, including those in Central Circles, were legally sustainable.
  3. Whether writ jurisdiction could be invoked to challenge proceedings at the notice stage.
  4. Whether statutory requirements and procedural safeguards had been complied with by the Department.

  Petitioner’s Arguments

  • The petitioner contended that the impugned notices were issued without lawful jurisdiction.
  • It was argued that mandatory statutory preconditions for initiating reassessment or assessment proceedings had not been satisfied.
  • The proceedings were alleged to be arbitrary and violative of principles of natural justice.
  • The petitioner sought quashing of the notices and restraint on further action by the Department.

  Respondent’s Arguments (Revenue)

  • The Revenue submitted that the proceedings were initiated pursuant to lawful search and investigation operations.
  • Jurisdiction of the concerned Assessing Officers was validly assumed under the provisions of the Income Tax Act, 1961.
  • It was contended that all procedural requirements had been duly complied with prior to issuance of notices.
  • The Department further argued that the petitioner had effective alternative remedies under the Act and that writ jurisdiction should not be exercised at a preliminary stage.

Court Order / Findings

  • Proceedings initiated pursuant to search and investigation were within the statutory framework.
  • Jurisdiction exercised by the Assessing Officers, including those in Central Circles or regular wards, was legally permissible.
  • No patent illegality or jurisdictional defect warranting interference under Article 226 of the Constitution was established.
  • Disputed issues could be appropriately addressed during assessment proceedings and through statutory appellate remedies.

 Important Clarification

  • Courts ordinarily refrain from quashing income-tax notices at the threshold where alternate statutory remedies are available.
  • Search-based and investigation-triggered proceedings are generally upheld if supported by statutory authority.
  • Writ jurisdiction is exercised only where there is clear lack of jurisdiction, procedural illegality, or violation of natural justice.
  • Taxpayers are expected to contest factual and legal issues through the assessment process and statutory appellate mechanism.

Link to download the order –  https://www.mytaxexpert.co.in/uploads/1772275138_NEWWAVEREALTORSPRIVATELIMITEDVsINCOMETAXOFFICERWARD184DELHIANR..pdf 

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