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, 1961
  • Notices issued under Section 148 for Assessment Years 2015–16, 2016–17, and 2017–18
  • Constitutional validity of Section 115BBE

The petitioner argued that:

  • Notices were issued beyond the permissible limitation period
  • Mandatory sanction was taken from the wrong authority (Principal Commissioner instead of Principal Chief Commissioner)
  • Section 115BBE is unconstitutional and leads to arbitrary taxation

Meanwhile, the Revenue submitted that:

  • Final assessment orders had already been passed
  • Issues raised involve mixed questions of fact and law, suitable for appellate forums

Issues Involved

  1. Whether reassessment notices under Section 148 were validly issued beyond limitation.
  2. Whether improper sanction vitiates reassessment proceedings.
  3. Whether Section 115BBE is unconstitutional due to alleged arbitrariness and misuse.
  4. Whether writ jurisdiction under Article 226 is maintainable when alternate remedies exist. 

Petitioner’s Arguments

  • Limitation Violation: Notices issued beyond statutory period without proper authority approval.
  • Improper Sanction: Approval required from Principal Chief Commissioner, not Principal Commissioner.
  • Constitutional Challenge:
    • Section 115BBE violates Articles 14 & 19
    • Leads to arbitrary and discriminatory taxation
    • Allows excessive discretion to Assessing Officer
  • Relied on:
    • CIT v. P.K. Noorjahan (discretion under Sections 68–69D)

Respondent’s Arguments

  • Final assessment orders already passed; writ petitions are premature/irrelevant
  • Limitation and procedural issues involve factual determination
  • Appropriate remedy lies before appellate authorities under the Income Tax Act

 

Court Findings / Judgment

The Delhi High Court held:

1. Constitutional Validity of Section 115BBE

  • Mere possibility of misuse does not render a provision unconstitutional
  • Courts presume lawful and fair application of statutes

Relied on:

  • Maganlal Chhaganlal Pvt Ltd vs Municipal Corporation of Greater Bombay
  • Collector of Customs vs Nathella Sampathu Chetty 

2. Availability of Alternate Remedy

  • Income Tax Act provides a complete machinery for redressal
  • Writ jurisdiction should not be invoked when statutory remedy exists

Relied on:

  • Commissioner of Income Tax vs Chhabil Dass Agarwal

3. On Reassessment Challenges

  • Issues like limitation and sanction involve mixed questions of fact and law
  • Must be adjudicated before appellate authorities

Court Order

  • Writ petitions dismissed
  • Liberty granted to petitioner to raise all issues before appellate authority

Important Clarifications

  • Statutory provisions cannot be struck down merely due to potential misuse
  • Writ jurisdiction is not a substitute for statutory remedies
  • Tax disputes involving factual examination must follow appellate hierarchy

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

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