Facts of the Case

The petitioner, Triveni Enterprises Limited, filed writ petitions challenging:

  • Orders dated 25 July 2022 passed under Section 148A(d) of the Income Tax Act.
  • Notices issued under Section 148 for Assessment Years 2015–16, 2016–17, and 2017–18.
  • The constitutional validity of Section 115BBE of the Act.

The petitioner contended that:

  • Notices were issued beyond three years from the end of the relevant assessment years.
  • Sanction was obtained from the wrong authority (Principal Commissioner instead of Principal Chief Commissioner).

During the proceedings, it was also revealed that final assessment orders had already been passed for the relevant years.

Issues Involved

  1. Whether reassessment notices under Section 148 were valid when issued beyond limitation and with alleged improper sanction.
  2. Whether the constitutional validity of Section 115BBE could be challenged in writ jurisdiction.
  3. Whether writ jurisdiction under Article 226 is maintainable when alternate appellate remedies exist. 

Petitioner’s Arguments

  • The reassessment notices were time-barred and issued without proper sanction.
  • Section 115BBE is arbitrary and violative of Articles 14 and 19, as it:
    • Allows excessive discretion to assessing officers.
    • Leads to unequal treatment of similarly placed assessees.
    • Imposes disproportionately high taxation (including surcharge and penalties).
  • The appellate authority cannot adjudicate constitutional validity; hence writ jurisdiction is appropriate.

Respondent’s Arguments

  • Final assessment orders had already been passed for the relevant years.
  • Issues like limitation involve mixed questions of fact and law, which should be decided by appellate authorities.
  • The Income Tax Act provides a complete machinery for redressal; hence writ petitions are not maintainable. 

Court’s Findings / Order

  1. On Constitutional Validity of Section 115BBE
    • A statutory provision cannot be declared unconstitutional merely due to possibility of misuse.
    • Courts must presume lawful and fair application of statutes unless proven otherwise.
    • Therefore, Section 115BBE cannot be struck down on apprehension of abuse.
  2. On Maintainability of Writ Petition
    • The Income Tax Act provides a complete mechanism for assessment and appeal.
    • Assessees must exhaust statutory remedies before invoking Article 226 jurisdiction.
  3. Final Decision
    • Writ petitions were dismissed.
    • Petitioner was granted liberty to approach appellate authorities and raise all contentions.

 

Important Clarifications by the Court

  • Mere possibility of misuse of statutory provisions is not a ground for declaring them unconstitutional.
  • Judicial review cannot be invoked when effective alternate remedies exist under the statute.
  • Constitutional challenges must be based on real and demonstrable arbitrariness, not hypothetical scenarios.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/MMH18122023CW162802023_115850.pdf

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