Experion Hospitality Pvt Ltd. Vs ITO (Delhi High Court)
The Delhi High Court disposed of a batch of writ petitions challenging notices issued under Section 148 of the Income-tax Act, 1961 for Assessment Years 2008–09 and 2011–12, along with consequential proceedings and rejection of objections. The reassessment notices were based on a common investigation by the Directorate of Income Tax (Intelligence & Criminal Investigation), alleging that large investments received from a Singapore-based entity were routed through complex structures involving entities in low-tax jurisdictions and that the investing entity lacked creditworthiness. In the relevant years, the petitioners had filed returns which were either accepted under Section 143(1) or assessed under Section 143(3), and no additions were made in respect of the impugned investments.
Read Supreme Court Judgment in above case: SC Dismisses Reopening as Basis Vanishes After Acceptance in Later Years
The Court noted that similar reassessment notices for Assessment Year 2012–13, based on identical reasons, had earlier survived judicial scrutiny. However, pursuant to those proceedings, a reassessment order dated 22.04.2021 was passed under Sections 147/143(3), wherein the Assessing Officer, after detailed enquiry, accepted the identity, creditworthiness and genuineness of the foreign investor and made no addition in respect of the investments. The Court also took note of subsequent assessments in later years where similar capital infusions and interest income from the same foreign entity were examined and accepted by the Department under Section 143(3). In one year, an addition under Section 68 was deleted in appeal.
