New Delhi: The Delhi High Court on Friday said it cannot issue any direction to the Centre to cap cash transactions at Rs 10,000 as it will lead to a contradiction with the income tax law, which has set a limit of Rs two lakh.

The observation by a bench of Chief Justice D N Patel and Justice C Hari Shankar came during the hearing of a PIL seeking directions to the Centre and the AAP government to cap cash transactions at Rs 10,000.

Taking note of the view expressed by the bench, BJP leader and lawyer Ashwini Kumar Upadhyay withdrew his petition.

"Petition dismissed as not pressed," the court said.

Upadhyay had sought the limit on cash transactions, saying it would help curb illegal activities like terrorism, corruption and use of black money.

"Cash transactions in high denomination currency is used in illegal activities like terrorism, naxalism, separatism, radicalism, smuggling, money laundering, kidnapping, extortion and bribery," the petition had claimed.