Facts of the Case

The Petitioner, P C Financial Services Private Limited, filed an application seeking modification of the order dated 31st May 2022, relying upon a separate order passed in another writ petition directing release of funds to meet essential business expenditures, including employee salaries.

The dispute originated from orders dated 17th December 2021 issued under Section 132(9B) of the Income Tax Act, 1961, concerning attachment/seizure proceedings.

During the pendency of the proceedings, fresh orders dated 16th June 2022 were passed under Section 281B by the Assessing Officer (ACIT, Central Circle-25, New Delhi).

Issues Involved

  1. Whether the writ petition challenging orders under Section 132(9B) remains maintainable after expiry of such orders by operation of law.
  2. Whether subsequent Section 281B provisional attachment orders affect the maintainability of the present petition.
  3. Whether the petition becomes infructuous due to change in circumstances during pendency.

Petitioner’s Arguments

  • The Petitioner sought modification of the earlier court order to secure release of funds for operational needs.
  • It was argued that reliance on another writ order justified similar relief.
  • The allegation of forum shopping was strongly denied, stating that the earlier petition related to a distinct cause of action.
  • The Petitioner acknowledged that due to subsequent developments (Section 281B orders), a fresh writ petition may be required.

Respondent’s Arguments

  • The Respondents contended that:
    • The impugned orders dated 17th December 2021 had already expired on 17th June 2022 by operation of law.
    • The Petitioner failed to challenge the subsequent Section 281B orders, making the present petition infructuous.
    • The Assessing Officer issuing the new orders was not impleaded as a party.
    • Allegations of forum shopping were raised due to parallel proceedings before different forums, including the Supreme Court.

Court’s Findings / Order

The Delhi High Court held:

  • Since the impugned orders under Section 132(9B) had expired, the writ petition no longer survived.
  • The petition was declared infructuous.
  • The Court granted liberty to the Petitioner to file a fresh writ petition challenging the subsequent Section 281B orders dated 16th June 2022.
  • It was expressly clarified that:
    • The Court did not adjudicate on merits.
    • All rights and contentions of parties were kept open.

Important Clarification

  • Expiry of statutory orders (like under Section 132(9B)) can render pending writ petitions infructuous.
  • Fresh cause of action arising from subsequent orders (Section 281B) requires independent challenge.
  • Courts may avoid adjudicating merits when the matter becomes infructuous due to change in circumstances.

Sections Involved

  • Section 132(9B), Income Tax Act, 1961 – Application of seized assets
  • Section 281B, Income Tax Act, 1961 – Provisional attachment to protect revenue

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:2426-DB/MMH04072022CW75462022_182940.pdf

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