Facts of the Case

  • The Petitioner, Tractebel Industry Engineering, filed a Writ Petition [W.P.(C) No. 7045 of 2007] before the Hon'ble High Court of Delhi.
  • The petition was filed to challenge the reassessment proceedings initiated against it via a notice issued under Section 147 and Section 148 of the Income Tax Act, 1961.
  • During the pendency of the writ petition, the objections raised by the Petitioner against the said notice were formally disposed of by the Revenue through an order dated September 20, 2007.
  • The Petitioner received the copy of this disposal order on October 3, 2007.

Issues Involved

  • Whether the writ petition challenging the initial issuance of the reassessment notice under Section 147/148 remains maintainable after the Revenue has formally disposed of the assessee's objections?
  • Whether liberty should be granted to the Petitioner to challenge the subsequent order disposing of its objections through appropriate legal channels.

Petitioner’s Arguments

  • The learned counsel appearing on behalf of the Petitioner submitted that since the objections filed against the notice under Section 147/148 had already been considered and disposed of by the Revenue via the order dated September 20, 2007, the current state of the petition required modification.
  • Consequently, the Petitioner sought leave of the Court to withdraw the present writ petition, requesting liberty to take recourse to alternative legal steps and remedies as permitted under the law to challenge the fresh order disposing of their objections.

Respondent’s Arguments

  • The Respondent, represented by the Assistant Director of Income Tax (International Taxation), Circle 2, New Delhi, through its counsel, noted the facts of the disposal of the objections and did not object to the withdrawal of the petition with the granted liberty.

Court Order / Findings

  • The Division Bench of the Hon'ble Delhi High Court, comprising Hon'ble Mr. Justice Madan B. Lokur and Hon'ble Dr. Justice S. Muralidhar, took note of the factual developments.
  • The Court accepted the statement of the Petitioner’s counsel regarding the disposal of objections.
  • The Court granted the requested leave and liberty to the Petitioner to pursue appropriate statutory remedies or legal steps as permitted under the law.
  • Accordingly, the writ petition was dismissed as withdrawn.

Important Clarification

  • This judgment underscores a standard procedural route in income tax litigation: when reassessment notices under Section 147/148 are challenged via writ, and the assessing officer subsequently disposes of the objections during pendency, the assessee must pivot to challenge the order disposing of those objections rather than pursuing the initial writ against the mere issuance of the notice.

Section Involved

  • Section 147 of the Income Tax Act, 1961 (Income escaping assessment).
  • Section 148 of the Income Tax Act, 1961 (Issue of notice where income has escaped assessment).

Link to download the order – https://delhihighcourt.nic.in/app/case_number_pdf/2007:DHC:7236-DB/MBL05102007CW70452007_151036.pdf

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