MOHAN BROTHERS PRIVATE LIMITED & ANR. vs. DCIT, CIRCLE 16(1) DELHI & ANR.

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W.P.(C)/3232/2026HC DelhiDLHC01009093202619 March 2026Bench: HON'BLE MR. JUSTICE VINOD KUMAR,HON'BLE MR. JUSTICE DINESH MEHTA3 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the petitioners, having volunteered to deposit 30% of the demand, could not retract from this concession. While acknowledging the adverse consequences of the prolonged pendency of the appeal and the attachment of bank accounts, the Court directed the petitioners to deposit Rs. 50 lakh by April 30, 2026, which would constitute approximately 20% of the demand. In the interest of justice and to enable the petitioners to arrange funds, the Assessing Officer was directed to immediately withdraw the attachment of the bank accounts. The Court also stipulated that if more than Rs. 1 lakh was in the petitioners' bank accounts, the Department could appropriate any amount exceeding Rs. 1 lakh, up to the Rs. 50 lakh directed to be paid, and this would be adjusted against the total payment. The Court warned that failure to deposit the Rs. 50 lakh by the stipulated date would allow the respondent-department to take further measures, including re-attaching bank accounts. The petition was disposed of.

What were the facts?

The petitioners, Mohan Brothers Private Limited and another, filed a writ petition before the Delhi High Court challenging the prolonged pendency of their appeals before the Commissioner of Income Tax (Appeals) for over 12 years. They contended that this delay, coupled with the seizure of their bank accounts, violated their fundamental right to carry on trade and business. The revenue argued that the petitioners had previously conceded to paying 30% of the demand in installments before the Appellate Authority on June 27, 2014. The High Court noted the delay but also the concession made by the petitioners.

What were the issues?

1. Whether the prolonged pendency of the appeals before the Appellate Authority for over 12 years, leading to the attachment of bank accounts, warrants intervention by the High Court under its writ jurisdiction, considering the petitioners' grievance of prejudice and violation of their fundamental right to trade (Article 19(1)(g) of the Constitution)? Assessee's contentions: The petitioners argued that the non-consideration of their appeals on merits for such an extended period by the Appellate Authority prejudiced them. They further contended that the coercive measure of attaching their bank accounts, a consequence of the Appellate Authority's inaction, should be quashed. They relied on their fundamental right to carry on trade and business. Revenue's contentions: The respondent argued that the petitioners had voluntarily made a concession before the Appellate Authority on June 27, 2014, agreeing to pay 30% of the demand in installments while seeking a stay. They contended that approaching the High Court with grievances against the respondent's actions was objectionable given this prior concession, and no indulgence was warranted despite potential delays by the Appellate Authority.

Which sections of the Income-tax Act were involved?

Article 19(1)(g)

AI-generated summary — verify with the full judgment below

W.P.(C) 3232/2026 Page 1 of 3

$~69 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3232/2026, CM APPL. 15576/2026 & CM APPL. 15577/2026

MOHAN BROTHERS PRIVATE LIMITED & ANR.

.....Petitioners Through: Mr. Salil Kapoor, Ms. Ananya Kapoor, Mr. Sumit Lalchandani & Mr.Shivam Yadav, Advs.

versus

DCIT, CIRCLE 16(1) DELHI & ANR.

.....Respondents Through: Mr. Gaurav Gupta, SSC, Mr.Shivendra Singh and Mr. Yojit Pareek, JSCs and Mr. Surya Jindal, Adv.

CORAM:

HON'BLE MR. JUSTICE DINESH MEHTA

HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

19.03.2026 1. The petitioners have approached this Court with a grievance that their appeals are lying pending before the Commissioner of Income Tax (Appeals), New Delhi (hereinafter referred to as ‘Appellate Authority’) for more than 12 years and neither the stay applications, nor the appeals have been decided and in the meantime, bank accounts of the petitioners have been seized. 2. Learned counsel for the petitioners submitted that attachment of the bank accounts has adversely affected petitioners’ Fundamental Right to carry on its trade and business enshrined under Article 19(i)(g) of the Constitution of India. He argued that the non-consideration of the petitioners’ appeals on This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/03/2026 at 17:53:38

W.P.(C) 3232/2026 Page 2 of 3

merits has seriously prejudiced them and since the Appellate Authority constituted under the Income Tax Act, 1961, itself is at fault in not deciding the petitioners’ appeal for 12 long years which was filed challenging the action of the Assessing Officer hence, coercive measure which is adopted i.e. attachment of the bank accounts of the petitioners, deserves to be quashed. 3. Learned counsel for the respondent on the other hand submitted that the Director/Representative of petitioner no.1 itself had wrote and gave concession before the Appellate Authority on 27.06.2014 that 30% of the demand would be paid in nine equal installments while praying for grant of stay. 4. He argued that once the assessee had himself taken this stand before the Appellate Authority that too in writing, approaching this Court at this juncture and raising grievances against the actions of the respondent is highly objectionable. He argued that may be there has been some delay on the part of the Appellate Authority but no indulgence is warranted in the instant case. 5. Having heard learned counsel for the parties, we are of the view that the petitioners having volunteered to deposit 30% of the demand cannot wriggle out of the concession made by it. 6. True it is, that prolongation caused due to the pendency of the appeal has resulted in adverse consequences to the petitioners and the attachment of bank accounts will further the problems of the petitioners. 7. In the interest of justice, we deem it appropriate to direct the petitioners to deposit an amount of Rs.50 lakh (which would make the total payment to roughly 20% of the demand) on or before 30.04.2026. However, with a view to enable the petitioners to arrange for funds, we direct the Assessing Officer to forthwith withdraw or lift the attachment of the petitioners’ bank accounts. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/03/2026 at 17:53:38

W.P.(C) 3232/2026 Page 3 of 3

On production of a web copy of the order instant, the jurisdictional Assessing Officer shall issue a communication/instruction to the bank to lift the seizure. 8. In case, there is an amount of more than Rs. 1 lakh lying in credit in the bank accounts of the petitioners, the Department shall be free to appropriate any amount over and above Rs. 1 lakh in petitioners’ bank accounts, subject of course to outer limit of Rs. 50 lakh. Needless to say that if any amount is appropriated by the department, the same shall be adjusted with the amount ordered to be paid by this instant order and the petitioners will be required to deposit the remaining amount. 9. We make it clear that in case the petitioner omits to deposit Rs.50 lakh as has been ordered by us in the instant order by 30.04.2024, the respondent-department shall be free to take any measure as deemed expedient including attachment of petitioners’ bank accounts again. 10. The petition is disposed of. All pending applications are also disposed of.

DINESH MEHTA, J

VINOD KUMAR, J MARCH 19, 2026 kk

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/03/2026 at 17:53:38

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