Facts of the Case

The assessee, Lachman Dass Bhatia, filed a series of six interconnected Income Tax Appeals (ITA Nos. 724 to 729 of 2010) before the High Court of Delhi. These statutory appeals were directed against the orders passed by the Income Tax Appellate Tribunal (ITAT) concerning the assessment proceedings initiated by the Assistant Commissioner of Income Tax. The multiple appeals spanned distinct assessment years or statutory points arising from the central search, assessment, or reassessment actions executed by the Revenue department. Rather than pursuing the statutory appellate remedy to its ultimate merits within the narrow contours of a substantial question of law under the Income Tax Act, the appellant evaluated alternative administrative and constitutional remedies to safeguard their legal interests. Consequently, the matter was listed before the division bench of the High Court to determine the maintainability and the requested withdrawal of these statutory tax appeals.

Issues Involved

  • Permissibility of Withdrawal: Whether a statutory appellant, having preferred an Income Tax Appeal under the provisions of the Income Tax Act, 1961, can be unconditionally permitted to withdraw the pending appellate proceedings for the explicit purpose of invoking the extraordinary writ jurisdiction of the High Court.
  • Consent of the Revenue: Whether the Income Tax Department (Revenue) has any legal objection or suffers structural prejudice if statutory appeals are dismissed as withdrawn to allow the assessee to seek constitutional remedies via a Writ Petition.

Petitioner’s Arguments

The learned counsel appearing on behalf of the appellant, Mr. R.M. Mehta, formally addressed the Division Bench and advanced the following contentions:

  • Alternative Constitutional Remedy: The appellant sought the leave of the court to withdraw all six interconnected statutory income tax appeals. The precise strategic objective behind this withdrawal was to clear the path for the filing of comprehensive Writ Petitions before the High Court.
  • Sufficiency of Writ Jurisdiction: The appellant argued that the specific grievances, procedural irregularities, or constitutional challenges inherent in their tax dispute could be more adequately, holistically, and effectively adjudicated under the extraordinary writ jurisdiction of the High Court rather than through the restrictive parameters of a statutory tax appeal.
  • Preservation of Rights: It was implicitly urged that the withdrawal should be recorded without prejudice to the petitioner’s right to agitate all available grounds, facts, and legal questions within the proposed writ proceedings.

Respondent’s Arguments

The Revenue was represented by its learned counsel, Mr. Deepak Chopra, who presented the standpoint of the Income Tax Department:

  • No Objection to Withdrawal: Upon formal communication of the appellant’s intent to withdraw the statutory appeals to file Writ Petitions, the learned counsel for the Revenue explicitly stated that the department had no objection to the grant of such permission.
  • Concession to Procedural Shift: The respondent did not contest the procedural transition from a statutory appeal format to an extraordinary writ jurisdiction format, thereby facilitating an expeditious disposal of the current appellate files without entering into the multi-layered merits of the tax dispute at this specific juncture.

Court Order / Findings

The Division Bench comprising Hon'ble The Chief Justice and Hon'ble Mr. Justice Manmohan took the matter into active consideration and recorded its brief yet definitive ruling:

  • Acknowledgment of Counsel: The High Court duly heard the oral submissions made by Mr. R.M. Mehta for the appellants and Mr. Deepak Chopra for the Revenue.
  • Recording of Mutual Consent: The Court took judicial note of the appellant’s formal prayer seeking withdrawal of the appeals to file writ petitions, alongside the explicit "no objection" recorded by the counsel representing the Revenue.
  • Disposition of Appeals: In view of the absolute consensus and the precise request made by the assessee, the High Court formally permitted the withdrawal. Consequently, ITA Nos. 724/2010, 725/2010, 726/2010, 727/2010, 728/2010, and 729/2010 were dismissed as withdrawn, concluding the appellate proceedings before the court on that date.

Important Clarification

  • Jurisdictional Transition Strategy: This order provides a critical procedural clarification that an assessee is legally entitled to withdraw pending statutory tax appeals (filed under the Income Tax Act) for the purpose of approaching the High Court under its constitutional writ jurisdiction, provided there is no objection from the opposite party. The dismissal of an appeal as "withdrawn" to pursue an alternative constitutional remedy does not equate to an adjudication on merits, thereby keeping the substantive legal issues completely open for evaluation in the subsequent writ proceedings.

Sections Involved

  • Section 260A of the Income Tax Act, 1961 (Appeal to High Court)
  • Article 226 of the Constitution of India (Power of High Courts to issue certain writs)

Link to download the order - https://delhihighcourt.nic.in/app/case_number_pdf/2010:DHC:9982/MMH16092010ITA7282010_163426.pdf 

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