In a significant verdict, the Delhi High Court, led by Acting Chief Justice Manmohan and Justice Mini Pushkarna, has upheld the constitutional validity of Section 115BBE of the Income Tax Act. The bench emphasized that statutory acts and their provisions should not be declared unconstitutional based on speculative fears of misuse or abuse of power.
The case, titled "Triveni Enterprises Limited Versus ITO," involves a challenge by the petitioner/assessee against orders passed under Section 148A(d) of the Income Tax Act for the assessment years 2015- 16, 2016- 17, and 2017- 18, along with notices issued under Section 148. The petitioner specifically contested the constitutional validity of Section 115BBE.
The crux of the petitioner's argument was that reassessment notices were issued beyond the three-year limit from the end of the assessment years. Additionally, the petitioner contended that such notices should have obtained sanction from the Principal Chief Commissioner of Income Tax rather than the Principal Commissioner of Income Tax.
On the other side, the department argued that final assessment orders had already been passed after the issuance of the order under Section 148A(d). The department posited that the issue of limitation, being a mix of both fact and law, should be raised before the Appellate Authorities.
The court, in its ruling, dismissed the petitioner's contention and affirmed that Section 115BBE cannot be deemed unconstitutional based on mere apprehensions of misuse. The judges emphasized that the Income Tax Act provides a comprehensive mechanism for tax assessment or reassessment, and taxpayers are obligated to follow this process rather than bypassing it to invoke the jurisdiction of the High Court under Article 226 of the Constitution.
Notable counsel in the case included Nishit Gandhi representing the petitioner and Aseem Chawla representing the respondent. The court case bears the number W.P.(C) 16280/2023 & CM APPLs.65559-655560/2023. This judgment is expected to set a precedent regarding the constitutional validity of Section 115BBE and reinforce the importance of following established legal procedures in tax matters.
Official copy of the order has been enclosed below
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