Facts of the Case

Orissa Cement Ltd. filed a writ petition before the Delhi High Court seeking a writ of prohibition against the Commissioner of Income Tax. The petitioner challenged the proceedings initiated by the Commissioner under Section 263 of the Income-tax Act, 1961, and sought to restrain the authority from proceeding further or passing any order pursuant to the notice issued under the said provision.

At the initial stage, the High Court granted interim protection and restrained the Commissioner from passing any final order pursuant to the notice dated 16 January 1978. Subsequently, pleadings were completed and the matter remained pending while related appellate proceedings continued before the Income Tax Appellate Tribunal (ITAT).

 

Issues Involved

  1. Whether the Commissioner of Income Tax could proceed with revisionary proceedings under Section 263 of the Income-tax Act, 1961.
  2. Whether the High Court should issue a writ of prohibition restraining the Commissioner from passing an order under Section 263.
  3. Whether the writ petition survived after the Commissioner had already passed an order under Section 263 and the petitioner had availed the statutory appellate remedy.

 

Petitioner’s Arguments

  • The petitioner challenged the validity and continuation of proceedings initiated under Section 263 of the Income-tax Act.
  • It sought a writ of prohibition restraining the Commissioner from proceeding further under the said provision or passing any consequential order.
  • During the final hearing, counsel for the petitioner submitted that an order under Section 263 had already been passed and that the petitioner had availed the statutory appellate remedy against such order.
  • In view of the subsequent developments, the petitioner did not press the writ petition.

 

Respondent’s Arguments

  • The respondents defended the proceedings initiated under Section 263 of the Income-tax Act.
  • During the pendency of the writ petition, the Revenue proceeded in accordance with the statutory framework.
  • The respondents maintained that the petitioner had an effective appellate remedy available under the Act and had already availed such remedy after the Section 263 order was passed.

 

Court Order / Findings

The Delhi High Court noted that:

  • The writ petition had originally been filed to restrain Respondent No. 1 from proceeding under Section 263 of the Income-tax Act or passing any order pursuant thereto.
  • By the time the matter came up for final consideration, the order under Section 263 had already been passed.
  • The petitioner had availed the appellate remedy available under the Income-tax Act against that order.
  • Counsel for the petitioner expressly stated that the writ petition was not being pressed.

Considering these developments, the Court held that the writ petition had become infructuous and accordingly disposed of it.

 

Important Clarification

  • The Court did not adjudicate upon the merits of the challenge to the exercise of revisionary jurisdiction under Section 263.
  • No finding was rendered regarding the legality or validity of the Section 263 order.
  • The writ petition was disposed of solely because the impugned proceedings had culminated in an order and the petitioner had already pursued the statutory appellate remedy.
  • The decision primarily reiterates the principle that writ proceedings may become infructuous where subsequent events render the original relief unnecessary.

 

Sections Involved

  • Section 263, Income-tax Act, 1961 – Revision of orders prejudicial to the interests of the Revenue.
  • Article 226, Constitution of India – Writ jurisdiction of the High Court.

 

Link to Download the Order

https://delhihighcourt.nic.in/app/case_number_pdf/2002:DHC:8333-DB/DKJ06082002ITA772002_151929.pdf

 

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