[Cites 24, Cited by 0]
Chattisgarh High Court
Rahul Gupta vs Income Tax Department on 16 April, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
2026:CGHC:17339-DB
NAFR
Digitally
signed by
HIGH COURT OF CHHATTISGARH AT BILASPUR
BABLU
BABLU RAJENDRA
RAJENDRA BHANARKAR
BHANARKAR Date:
2026.04.17
13:59:17
+0530
WA No. 237 of 2026
Rahul Gupta S/o Pawan Kumar Gupta Aged About 43 Years Mobile-
9039622335, R/o M - 20, Sector - 1, Avanti Vihar, Raipur- 492001
(Chhattisgarh), Chhattisgarh
... Appellant
versus
1 - Income Tax Department Through- Principal Chief Commissioner Of
Income Tax Aayakar Bhavan, Civil Lines, Raipur (Chhattisgarh)-
492001, Chhattisgarh
2 - Station House Officer Mahila Thana, Ambikapur District Surguja-
497001
3 - Station House Officer Thana Telibandha, Telibandha Raipur- 492001
... Respondent(s)
For Appellant(s) : Mr. Rahul Gupta, Appellant in person
For Respondent : Mr. Ajay Kumrani, Advocate
No.1
For Respondent : Mr. Praveen Das, Additional Advocate General
Nos.2 and 3
Hon'ble Shri Ramesh Sinha, Chief Justice
Hon'ble Shri Ravindra Kumar Agrawal, Judge
Judgment on Board
Per Ramesh Sinha, Chief Justice
16.04.2026
1. 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 vs. Income Tax Department and others) passed
by the learned Single Judge in WPC 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 ₹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 WPC/3084/2025, 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 WPC No.3084 of 2025,
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 Pvt. Ltd. v. Masood
Ahmed Khan, (2010) 9 SCC 496, P. Jayappan v. S.K. Perumal,
(1984) 149 ITR 696, and K.C. Builders v. ACIT, (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. DDIT (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, (1972) 2 SCC 890 and Maya Rani Punj v.
CIT, (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, (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 RBANMS Educational
Institution v. B. Gunashekar, 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).
Sd/- Sd/-
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
Bablu
