Bombay High Court Declines to Entertain Writ Against Income Tax Notices, States ‘Issues Can Be Agitated Before Appellate Authority’
Safiya Malik
The Bombay High Court has dismissed a series of writ petitions challenging notices and orders issued under Section 153C of the Income-tax Act, 1961. The Division Bench of Justice M.S. Sonak and Justice Jitendra Jain observed that the petitioner could raise these issues before the statutory appellate authority under the Act. The Bench stated, “The issues raised in the present petitions can be agitated before the Appellate Authority in an appeal filed against an order passed under Section 153C of the Act.”
The court further observed, “At least prima facie, we cannot say that there was no incriminating material or that the exercise was wholly without jurisdiction.” In this context, the court declined to intervene at the present stage and allowed the assessment proceedings to continue.
The Bench further recorded that the issues raised involved mixed questions of fact and law and were best left to be decided by the authorities under the Act.
The petitioner, DNH Spinners Private Limited, filed eleven writ petitions challenging notices issued under Section 153C dated 28 February 2024 and the orders rejecting objections to these notices. The petitions pertained to assessment years 2010-11 to 2020-21. The court treated Writ Petition (L) No. 4894 of 2025, relating to assessment year 2013-14, as the lead matter.
The court recorded that on 19 October 2019, a search under Section 132 of the Act was initiated in the case of Alok Kumar Agarwal, Ankit Agarwal, M/s. Alankit Limited and M/s. Alankit Assignments Limited in Delhi. It was stated that various documents and books of accounts were seized from the search parties.
Subsequently, on 31 May 2022, the Deputy Commissioner of Income Tax (DCIT), Delhi communicated to the DCIT, Mumbai that, during the assessment proceedings under Section 153A in the case of the Alankit Group, certain materials and documents were found which had a bearing on the total income of the petitioner. A satisfaction note and annexures were forwarded accordingly. The satisfaction note recorded that the Alankit Group was engaged in providing accommodation entries to various parties, including the petitioner.
The DCIT, Mumbai recorded a satisfaction note on 28 February 2024, stating that various shell entities controlled by Alok Kumar Agarwal had transactions with the petitioner, involving accommodation entries over multiple assessment years. Based on this, proceedings under Section 153C were proposed for assessment years 2010-11 to 2020-21.
The petitioner responded on 3 April 2024, stating that it could not file its return of income due to a technical issue on the portal and requested a copy of the satisfaction note. On 6 April 2024, the petitioner uploaded objections, arguing that notices beyond six assessment years were without authority of law, as the limitation period should commence from the date on which the Assessing Officer received the documents, i.e., January 2024. The petitioner also argued that the threshold of income escaping assessment exceeding Rs.50 lakh had not been satisfied to invoke the extended period of 10 years.
The respondents, in their order dated 28 December 2024, rejected the objections, stating that incriminating materials were found for assessment years 2014-15, 2015-16, and 2016-17, and that the transactions were likely to have a bearing on the petitioner’s total income for assessment years 2010-11 to 2020-21. The respondents also concluded that the extended limitation period was applicable.
The Bench recorded that the petitioner raised several issues, including the absence of incriminating material for certain years, the interpretation of the block period under Section 153C, and the alleged lack of satisfaction that income exceeding Rs.50 lakh had escaped assessment. The court noted, “Whether for any assessment year or for all assessment years for which the notices are issued, there is incriminating material that would require investigation and inquiry into the documents received from the assessing officer at New Delhi by the assessing officer of the petitioner.”
The court further observed, “This Court cannot go through the material received from the New Delhi assessing officer to ascertain any incriminating material for each of the assessment years for which the notice is issued.”
On the petitioner’s argument concerning the generation of the Document Identification Number (DIN), the Bench recorded, “The notice dated 28 February 2024 at Exhibit B does bear the DIN number.” The court added that this matter involved factual determinations and could not be adjudicated within writ proceedings.
Addressing the contention regarding lack of opportunity to challenge the satisfaction note, the court noted, “In the order dated 28 December 2024, the respondents have rejected the objections and in the said order it is expressly stated in paragraph 8 that the petitioner was given time of 15 days from the date of disposal of the objections to decide its further course of action.”
On the issue of correlation between documents and assessment years, the court recorded, “This investigation of co-relation of the documents assessment year-wise cannot be done by this Court and more so while exercising discretionary extraordinary jurisdiction under Article 226 of the Constitution of India.”
Regarding the limitation issue under Section 153B(1) of the Act, the Bench observed, “The question of limitation is a mixed question of law and facts.” The court stated that the determination of when records were handed over to the petitioner’s Assessing Officer would require factual examination, which was not suited for writ jurisdiction.
The Bench noted, “In our view, it would be premature to presume that the assessment order passed under Section 153C would be against the petitioner.” The court further stated that, if the petitioner’s contentions were accepted by the Assessing Officer in the assessment proceedings, no prejudice would be caused.
The court concluded by stating, “In view of the above, all the petitions are dismissed with no order regarding cost.” The Bench left it open to the petitioner to raise all issues in accordance with law before the appropriate authority under the Act.
Advocates Representing the Parties
For the Petitioner: Mr. Dharan Gandhi
For the Respondents: Mr. Akhileshwar Sharma, along with Ms. Shraddha Worlikar
Case Title: DNH Spinners Private Limited v. Deputy Commissioner of Income Tax, Central Circle -1(2) & Ors.
Neutral Citation: 2025:BHC-OS:4250
Case Number: WRIT PETITION (L) NO.4894 OF 2025 (with connected matters)
Bench: Justice M.S. Sonak, Justice Jitendra Jain
[Read/Download order]
