NIVAYA RESOURCES PRIVATE LIMITED vs. PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-6 & ORS.
What did the High Court hold?
The Delhi High Court, after hearing arguments, allowed the petitioner to withdraw the writ petition to avail of the remedy of review as indicated in the CBDT instruction dated 29.02.2016. The Court noted the petitioner's apprehension regarding the high-pitched assessment and the subsequent demand. The writ petition was dismissed as withdrawn with specific directions. The petitioner was to file a review petition before the Principal Commissioner of Tax within two weeks. The Principal Commissioner was directed to consider the petitioner's prima facie case, the impact of CBDT instructions dated 21.08.1969 and 02.02.1993, and accord a personal hearing. A speaking order was to be passed and furnished to the petitioner. Crucially, no coercive measures were to be taken against the petitioner pending the disposal of the review petition and for two weeks thereafter, in case the decision was adverse.
What were the facts?
The petitioner, Nivaya Resources Private Limited, filed a writ petition before the Delhi High Court challenging a high-pitched assessment order passed by the Assessing Officer (AO) on September 30, 2021. The AO assessed the income at Rs. 64,38,55,330/-, a significant increase from the declared income of Rs. 5,07,06,650/-, resulting in an addition of Rs. 59,31,48,687/- and a demand of Rs. 58,77,20,530/-. The petitioner had sought a stay on this demand from the AO while an appeal was pending before the Commissioner of Income Tax (Appeals) [CIT(A)], which was declined. The AO had mandated a payment of 20% of the demand, later reduced to 10%, amounting to Rs. 5,87,72,053/-.
What were the issues?
1. Whether the petitioner has a prima facie case warranting relief in its writ petition concerning the high-pitched assessment and demand. (Mixed question of law and fact, concerning principles of natural justice and assessment proceedings). 2. Whether the instructions dated 21.08.1969 and 02.02.1993 issued by the CBDT are relevant and should be considered in the context of the petitioner's plea for a stay on demand. (Question of law, concerning the applicability of administrative instructions). Assessee's Contentions: The petitioner argued that the assessment was high-pitched, with the assessed income being almost eleven times the declared income. They contended that the stay on demand was declined by the AO without considering the prima facie case and the impact of CBDT instructions dated 21.08.1969 and 02.02.1993. The petitioner sought protection while preferring a review application. Revenue's Contentions: The judgment records that the revenue was represented by Mr. Abhishek Maratha, Sr. Standing Counsel. However, no specific arguments or contentions made by the revenue are recorded in the judgment.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
$~3 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 1432/2023 & CM APPL. 5388/2023
NIVAYA RESOURCES PRIVATE LIMITED ..... Petitioner
Through: Mr Sumit Lalchandani, Advocate.
versus
PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-6 & ORS.
..... Respondents Through: Mr Abhishek Maratha, Sr. Standing Counsel.
CORAM:
HON'BLE MR JUSTICE RAJIV SHAKDHER
HON'BLE MS JUSTICE TARA VITASTA GANJU
O R D E R %
21.02.2023 [Physical Hearing/Hybrid Hearing (as per request)] 1. After some arguments, Mr Sumit Lalchandani, who appears on behalf of the petitioner, seeks to withdraw the writ petition in order to avail of the remedy of review, as indicated in the instruction dated 29.02.2016 issued by the Central Board of Direct Taxes (CBDT). 2. Having said so, Mr Lalchandani says that the only apprehension that the petitioner has is that this is a case of high pitched assessment, whereby the respondents/revenue have assessed the income of the petitioner at Rs.64,38,55,330/- against the declared income of Rs.5,07,06,650/-. 2.1. In other words, an addition has been made by the Assessing Officer (AO) amounting to Rs.59,31,48,687/-, while passing an assessment order under Section 143(3) of the Income Tax Act, 1961 [in short “Act”] on W.P.(C) 1432/2023
Page 1 of 3 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 09/06/2026 at 13:07:44
30.09.2021. 2.2 As a result of this, Mr Lalchandani says that assessee has been called upon to make over towards tax, an additional amount of Rs.58,77,20,530/- . 3. Mr Lalchandani also says that, having regard to the fact that the assessed income is almost eleven times the declared income, stay on demand of the same was sought from the AO, in view of the fact that an appeal was pending with the Commissioner of Income Tax (Appeals) [in short, “CIT(A)”] against the assessment order dated 30.09.2021, which has been declined without adverting to the following aspects. (i) Prima facie case set up by the petitioner; (ii) Instructions dated 21.08.1969 and 02.02.1993. 4. We may note that the AO, while relying upon the instruction dated 29.02.2016 (read with 31.07.2017), has observed that the petitioner would be mandatorily required to pay 20% of the demand i.e., Rs.11,75,44,106/-, and he has, interestingly, thereafter, scaled it down to 10% of the outstanding demand; this amount has been quantified as Rs.5,87,72,053/-. 5. Given these circumstances, Mr Lalchandani says that some protection would be required, while the review application is preferred and decided by the concerned statutory authority. 6. Accordingly, the writ petition is dismissed as withdrawn, with the following caveat: (i) The petitioner would prefer a review petition before the concerned statutory authority i.e., the Principal Commissioner of Tax; (ii) The review petition will be filed within the next two weeks. (iii) The Principal Commissioner of Tax will consider as to whether or not W.P.(C) 1432/2023
Page 2 of 3 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 09/06/2026 at 13:07:44
the petitioner has a prima facie case and also the impact of the instructions dated 21.08.1969 and 02.02.1993; (iv) The Principal Commissioner of Tax will also accord personal hearing to the authorized representative of the petitioner. (v) Furthermore, the Principal Commissioner of Tax will pass a speaking order; a copy of which will be furnished to the petitioner. (vi) Pending the disposal of the review petition and for a period of two weeks thereafter, no coercive measures will be taken against the petitioner, in case the decision rendered is adverse to the interest of the petitioner. 7. Consequently, the pending application shall stand closed. 8. Parties will act based on the digitally signed copy of the order.
RAJIV SHAKDHER, J
TARA VITASTA GANJU, J
FEBRUARY 21, 2023/ ha
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W.P.(C) 1432/2023
Page 3 of 3
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 09/06/2026 at 13:07:44
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