VARDHMAN TEXTILES LTD vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, LUDHIANA

Facts

The petitioner, Vardhman Textiles Ltd., filed a writ petition challenging a notice dated March 29, 2017, issued under Section 147 of the Income-tax Act and an order dated September 29, 2017, rejecting objections filed under Section 148 of the Act. The assessment year in question was 2010-11. The respondent was the Deputy Commissioner of Income Tax, Circle-1, Ludhiana. The revenue informed the High Court that the assessment proceedings initiated under Section 148 of the Act had been dropped via an order dated February 28, 2019. Consequently, the petitioner requested the writ petition be disposed of as infructuous.

Held

The High Court noted that the revenue had communicated that the assessment proceedings initiated under Section 148 of the Act for the assessment year 2010-11 had been dropped vide an order dated February 28, 2019. In light of this development, the petitioner's counsel submitted that the writ petition had become infructuous. The Court acknowledged this submission and ordered accordingly. The primary finding was that the challenge to the assessment proceedings was rendered moot by the revenue's subsequent action of dropping the proceedings. No specific issue regarding the merits of the original assessment proceedings was decided, as the case was disposed of on a procedural ground. The operative direction was to dispose of the writ petition as infructuous.

Key Issues

1. Whether the writ petition challenging the notice under Section 147 and the order rejecting objections under Section 148 of the Income-tax Act is rendered infructuous, given that the assessment proceedings have been dropped by the revenue. Assessee's contention: The petitioner argued that since the assessment proceedings initiated under Section 148 of the Act have been dropped by the revenue, the present writ petition has become infructuous and should be disposed of accordingly. Revenue's contention: The revenue, through a communication from the Deputy Commissioner of Income Tax, informed the High Court that the assessment proceedings initiated under Section 148 of the Act for assessment year 2010-11 have been dropped vide an order dated February 28, 2019. The revenue did not contest the petitioner's prayer.