Delhi High Court Upholds Constitutional Validity Of Section 115BBE Of Income Tax Act

The Delhi High Court has upheld the constitutional validity of Section 115BBE of the Income Tax Act.

The bench of Acting Chief Justice Manmohan and Justice Mini Pushkarna has observed that Statutory Acts and their provisions are not to be declared unconstitutional on the fanciful theory that power would be exercised in an unrealistic fashion or in a vacuum or on the ground that there is an apprehension of misuse of Statutory Provision or the possibility of abuse of power. It must be presumed, unless the contrary is proved, that the administration and application of a particular law would be done “not with an evil eye and an unequal hand.”.

The petitioner/assessee has challenged the orders passed under Section 148A(d) of the Income Tax Act, 1961, for the assessment years 2015–16, 2016–17, and 2017–18, and the notices issued under Section 148. The petitioner challenged the constitutional validity of Section 115BBE.

The assessee contended that the reassessment notices were issued after three years from the end of the assessment years and that they too could have been issued after obtaining the sanction from the Principal Chief Commissioner of Income Tax and not from the Principal Commissioner of Income Tax.

The department contended that, after passing the order under Section 148A(d), final assessment orders had been passed. The issue of limitation, being a mixed question of fact and law in the batch of matters, should be raised before the Appellate Authorities.

The court stated that Section 115BBE cannot be held unconstitutional on the ground that there is an apprehension of misuse of the provision.

The court held that the Income Tax Act provides complete machinery for the assessment or reassessment of tax, and the assessee is not permitted to abandon that machinery to invoke the jurisdiction of the High Court under Article 226 of the Constitution.

Counsel For Petitioner: Nishit Gandhi

Counsel For Respondent: Aseem Chawla

Case Title: Triveni Enterprises Limited Versus ITO

Citation: 2023 LiveLaw (Del) 1352

Case No.: W.P.(C) 16280/2023 & CM APPLs.65559-655560/2023

Click Here To Read The Order