Facts of the Case

The petitioner, Tata Teleservices Ltd, filed multiple writ petitions (W.P.(C) Nos. 2024/2011, 2026/2011, 2027/2011, 2030/2011 & 2032/2011) challenging the vires of the proviso to Section 201(3) of the Income Tax Act, 1961, as inserted by Finance (No.2) Act, 2009, effective from 1st April 2010. The petitioner sought permission to withdraw the existing petitions with liberty to file a fresh petition raising constitutional validity of the proviso. Reference was made to prior decisions, notably:

  • Commissioner of Income Tax vs. NHK Japan Broadcasting Corporation [2008] 305 ITR 137 (Delhi)
  • Commissioner of Income Tax vs. Hutchison Essar Telecom Ltd [2010] 323 ITR 230 (Delhi)

The petitioner requested continuation of interim protection against coercive action for 15 days to allow filing of the fresh writ petition.

Issues Involved

  1. Whether the proviso to Section 201(3) of the Income Tax Act, 1961 violates constitutional provisions.
  2. Whether the petitioner is entitled to withdraw the existing writ petitions with liberty to file a fresh petition.
  3. Whether interim protection against coercive steps should continue pending fresh proceedings.

Petitioner’s Arguments

  • The petitioner argued for withdrawal of the current writ petitions to file a fresh petition challenging the constitutional validity of the proviso.
  • Claimed that grounds already raised should be preserved for inclusion in the new petition.
  • Requested interim protection from coercive action for 15 days to facilitate filing.

Respondent’s Arguments

  • Respondent, Assistant Commissioner of Income Tax TDS & Anr, did not oppose withdrawal but noted the statutory framework under Section 201(3).
  • The focus was on ensuring compliance with procedural requirements in tax recovery pending litigation.

Court Order / Findings

  • The Delhi High Court, by Hon’ble Mr. Justice Sanjiv Khanna and Hon’ble Mr. Justice R.V. Easwar, accepted the withdrawal of writ petitions with liberty to file fresh petitions.
  • Directed that the respondent shall not take coercive steps to recover the impugned demand for a period of 15 days from the date of order.
  • Emphasized that the petitioner may include grounds already raised in the withdrawn petitions in the new writ petitions.

Important Clarifications

  • Interim relief was granted only for 15 days, strictly to allow procedural compliance.
  • References to earlier judgments reaffirm that constitutional validity of Section 201(3) proviso is an arguable matter for judicial review.

 

Sections Involved

  • Section 201(3) of the Income Tax Act, 1961 (Proviso as inserted by Finance Act, 2009)

Link to download the order https://delhihighcourt.nic.in/app/case_number_pdf/2011:DHC:17292-DB/SKN28112011CW20272011_142859.pdf

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