Facts of the Case

The petitioners, Ashoka Big Ventures and Kabana Agro Foods, approached the Delhi High Court by way of writ petitions challenging actions of the Income Tax Department whereby their bank accounts had been frozen.

During the hearing, counsel for the Revenue made an oral assurance that the bank accounts of the petitioners would be de-freezed. Based on this assurance, the petitioners sought permission from the Court to withdraw the writ petitions with liberty to file fresh petitions if required in future.

Issues Involved

  1. Whether the writ petitions challenging freezing of bank accounts should be adjudicated when the Revenue assures de-freezing.
  2. Whether petitioners should be allowed to withdraw petitions with liberty to re-approach the Court in case of non-compliance.

Petitioners’ Arguments

  • The petitioners challenged the freezing of their bank accounts as unjustified.
  • Upon receiving assurance from the Revenue that accounts would be de-freezed, the petitioners opted to withdraw the petitions.
  • They requested liberty to file fresh petitions if circumstances so required.

Respondent’s Arguments

  • The Revenue, through its counsel, provided an oral assurance before the Court that the petitioners’ bank accounts would be de-freezed.
  • This assurance effectively addressed the grievance raised in the petitions.

Court’s Findings / Order

  • The Delhi High Court recorded the submission of the petitioners based on the Revenue’s assurance.
  • The Court permitted withdrawal of the writ petitions.
  • The petitions were dismissed as withdrawn with liberty to file fresh petitions if necessary.

Important Clarification

  • The Court did not adjudicate on merits of the freezing action.
  • The order is based solely on the statement/assurance of the Revenue.
  • Liberty granted ensures that petitioners can re-approach the Court if the assurance is not fulfilled or circumstances change.

Sections Involved

  • Income Tax Act, 1961
    • Section relating to attachment/freezing of bank accounts (commonly linked with Section 281B – Provisional Attachment)

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2019:DHC:7523-DB/SMD22072019CW28332019_144014.pdf

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