Facts of the Case

  • Petitioners Hero Honda Motors Ltd and Hero Motocorp Ltd had special audits directed under the Income Tax Act.
  • Writ petitions (W.P.(C) 8684/2010 and W.P.(C) 49/2012) were filed in Delhi High Court challenging the necessity of the special audit.
  • Petitioners had substantially succeeded in appellate proceedings, although one year’s appeal was still pending.
  • Petitioners submitted a request to withdraw the writ petitions without prejudice to their contention on unjustified special audit.

Issues Involved

  1. Whether special audit under Income Tax was justified for the assessment years concerned.
  2. Whether withdrawal of the writ petitions affects subsequent pending writs on the same issue.

Petitioner’s Arguments

  • Special audit was not justified in the facts of the case.
  • Withdrawal of current writ petitions should not impact their rights or contentions in subsequent years.
  • Petitioners had achieved partial success in appellate proceedings and sought procedural closure.

Respondent’s Arguments

  • The Income Tax Department, represented by the Additional Commissioner of Income Tax, did not contest the withdrawal, and procedural compliance was maintained.
  • Special audits were directed in subsequent years and needed to continue as per statutory provisions.

Court Order / Findings

  • The Court accepted the withdrawal of the writ petitions without expressing any opinion on merits.
  • Withdrawal was recorded without prejudice, ensuring petitioners’ contentions regarding special audit remain intact for subsequent proceedings.
  • Petitioners were allowed procedural relief without affecting pending appeals or subsequent audits.

Important Clarification

  • Withdrawal of writ petitions does not bar petitioners from challenging the special audit in future proceedings.
  • The order is procedural in nature and does not comment on the merits of special audit under Income Tax provisions.

Link to download the order: https://delhihighcourt.nic.in/app/case_number_pdf/2013:DHC:7754-DB/SKN21112013CW86842010_111736.pdf 

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