Dismissal of writ appeal upheld as no mandamus lies to compel

Dismissal of writ appeal upheld as no mandamus lies to compel time-barred reassessment action.

Issue

Whether a writ of mandamus under Article 226 of the Constitution of India can be issued to compel the Income Tax authorities to act on a Tax Evasion Petition and initiate reassessment proceedings when the statutory limitation period under Section 148 has already expired.

Facts

The appellant filed a detailed Tax Evasion Petition against specific individuals, alleging unaccounted cash transactions amounting to approximately ₹1.80 crores.
The complaint was backed by substantial evidentiary material, including an FIR, sworn testimonies before a Family Court, and affidavits indicating assets disproportionate to declared income.
The Income Tax Department rejected the complaint solely on the grounds of statutory limitation under Section 148, choosing not to initiate an inquiry under Sections 68, 69, or 69A–69C.
Based on replies received under the Right to Information (RTI) Act, the appellant asserted that there was a complete absence of action and a lack of inter-agency coordination by the authorities.
A Single Judge of the High Court dismissed the appellant’s writ petition, ruling that a writ of mandamus could not be issued at that stage and declined to examine the statutory obligations of the authorities under Article 226.
The appellant subsequently filed a writ appeal challenging the order of the Single Judge.

Decision

Held, the Single Judge did not commit any illegality, irregularity, or jurisdictional error in refusing to issue the writ of mandamus.
Held, the High Court cannot enter into the merits of a time-barred tax dispute or compel the department to exercise its investigative powers once the statutory deadline for reassessment has passed.
Held, the writ appeal is entirely devoid of merit and is consequently dismissed in favor of the Revenue.

Key Takeaways

Limitation Overrides Discretion: Even when a Tax Evasion Petition is backed by strong external evidence (like FIRs or court testimonies), the tax department cannot be forced via a writ to initiate reassessment once the strict statutory time limits prescribed under Section 148 have expired.

Limits of Mandamus: A writ of mandamus cannot be used by courts to bypass or override the explicit statutory timelines laid down in fiscal laws like the Income-tax Act.

HIGH COURT OF CHHATTISGARH

Rahul Gupta

Income-tax Department

Ramesh Sinha, CJ.
and Ravindra Kumar Agrawal, J.

WA No. 237 of 2026

APRIL 16, 2026

Rahul Gupta for the Appellant. Ajay Kumrani, Adv. and Praveen Das, Additional Adv. General for the Respondent.

JUDGMENT

Ramesh Sinha , CJ.- Heard appellant Mr. Rahul Gupta in person as well as Mr. Ajay Kumrani, learned counsel, appearing for respondent No.1 and Mr. Praveen Das, learned Additional Advocate General, appearing for the respondent Nos.2 and 3.

2. This writ appeal is presented against the order dated 07.01.2026 (Rahul Gupta v. Income Tax Department) passed by the learned Single Judge in WP (C) No. 3084 of 2025, whereby, the writ petition filed by appellant herein was dismissed by the learned Single Judge.

3. Brief facts of the case is that the appellant filed a writ petition invoking Articles 14, 19(1)(a), 21, 261 and 265 of the Constitution seeking enforcement of statutory duties against alleged tax evasion based on judicially admitted unaccounted cash transactions of approximately Rs.1.80 crores, supported by an FIR, sworn testimony before the Family Court, and affidavits reflecting disproportionate declared assets; despite submission of a detailed Tax Evasion Petition (TEP) dated 13.02.2023 along with supplementary materials and RTI applications revealing absence of action or inter-agency coordination, Respondent No. 1 rejected the complaint on 22.08.2025 solely on the ground of limitation under Section 148 of the Income Tax Act, 1961 without initiating inquiry under relevant provisions such as Sections 68, 69, 69A-69C or exercising investigative powers, and the Learned Single Judge, by order dated 07.01.2026 in Rahul Gupta (supra), dismissed the writ petition without addressing the distinction between reassessment and independent investigation/prosecution or the continuing nature of unexplained assets, leading the Appellant to prefer the present appeal on the ground that such inaction permits ongoing violation of tax laws and loss to public revenue. Being aggrieved by the same, the appellant filed Rahul Gupta (supra), whereby, the petition filed by the appellant herein / writ petitioner was dismissed vide order dated 07.01.2026. Hence, the present writ appeal.

4. Learned counsel for the appellant submits that the impugned judgment suffers from a jurisdictional error and is a non-speaking, mechanical order, having failed to consider the detailed pleadings, statutory provisions, and binding precedents governing the field, thereby rendering it unsustainable in law. Learned Single Judge erroneously treated limitation under Section 148 of the Income Tax Act, 1961 as a complete bar, ignoring the settled position that reassessment proceedings are distinct from and do not control investigation, penalty, or prosecution under Chapters XXI and XXII of the Act. It is well established through authoritative pronouncements such as Kranti Associates (P.) Ltd. v. Masood Ahmed Khan (2010) 9 SCC 496, P. Jayappan v. S.K. Perumal, First ITO (SC)/[1984] 149 ITR 696 (SC), and K.C. Builders v. Asstt. CIT (SC)/[2004] 265 ITR 562 (SC) that prosecution for tax evasion is independent of assessment proceedings and can proceed notwithstanding their initiation or limitation, particularly in cases involving admitted unaccounted cash transactions. He further submits that the impugned action fails to appreciate that tax evasion constitutes a serious economic offence, to which limitation does not apply by virtue of the Economic Offences (Inapplicability of Limitation) Act, 1974, and that the Income Tax Department itself has consistently maintained before judicial forums that prosecution is not dependent on assessment proceedings, as seen in Srinidhi Karti Chidambaram v. Deputy DIT, (Investigation) Unit 3(2) Chennai [2020] 424 ITR 30 (Madras)/(Crl.O.P.Nos.22136 of 2019, decided on 11-12-2020 by Madras High Court). The continued possession, enjoyment, and investment of unexplained assets give rise to a continuing offence and recurring cause of action, attracting Sections 69 to 69C annually, as recognized in State of Bihar v. Deokaran Nenshi (SC)/(1972) 2 SCC 890 and Smt. Maya Rani Punj v. CIT (SC)/[1986] 157 ITR 330 (SC). Further, repeal of the Wealth-tax Act, 1957 does not extinguish accrued liabilities or pending investigations in view of Section 6 of the General Clauses Act, as affirmed in Rayala Corporation v. Director of Enforcement AIR 1970 SC 494 and Kolhapur Canesugar Works Ltd. v. Union of India (SC)/(2000) 2 SCC 536. He also submits that the impugned judgment overlooks that judicial admissions made in FIR, sworn testimony, and affidavits constitute substantive evidence triggering a mandatory duty upon authorities to investigate, and such power, being coupled with duty, is enforceable by writ of mandamus as held in Comptroller and Auditor General v. K.S. Jagannathan (1986) 2 SCC 679. The failure to act despite credible material, coupled with lack of inter-agency coordination, is arbitrary and violative of Articles 14, 21, 261 and 265 of the Constitution. The Learned Single Judge further erred in relegating the Appellant to alternate remedies, ignoring that the issue pertains to protection of public revenue and enforcement of statutory obligations, and in disregarding binding directions such as in Correspondence, RBANMS Educational Institution v. B. Gunashekar (SC)/2025 INSC 490 mandating action on high-value cash transactions, thereby permitting continuation of economic offences and causing ongoing loss to the public exchequer.

5. On the other hand, learned counsel for appearing for respondent No.1 opposes the submissions made by learned counsel for the appellant and submits that learned Single Judge after considering all the aspects of the matter has rightly dismissed the writ petition filed by the writ petitioner / appellant herein, in which no interference is called for.

6. We have heard learned counsel for the parties and perused the impugned order and other documents appended with writ appeal.

7. From perusal of the impugned order, it transpires that the learned Single Judge has dismissed the writ petition holding that in view of the facts of the case and the nature of relief sought, no writ of mandamus could be issued to the respondents at this stage. Learned Single Judge, without entering into the merits of the allegations or examining the statutory obligations of the authorities, declined to exercise jurisdiction under Article 226 of the Constitution and dismissed the petition. However, the appellant was granted liberty to avail appropriate remedies and raise all permissible defences before the concerned trial Court in the pending criminal proceedings.

8. Considering the submissions advanced by the learned counsel for the parties, perusing the documents appended with writ petition as also with writ appeal and also considering the finding recorded by learned Single Judge while dismissing the writ petition filed by the writ petitioner / appellant herein, we are of the considered opinion that learned Single Judge has not committed any illegality, irregularity or jurisdictional error in the impugned order warranting interference by this Court.

9. Accordingly, the writ appeal being devoid of merit is liable to be and is hereby dismissed. No cost(s).