ACIT Vs UK Grid Solutions Limited (Supreme Court of India)
The Supreme Court of India considered a Special Leave Petition filed by the Revenue challenging a judgment of the Delhi High Court concerning reassessment proceedings for Assessment Years 2013–14 and 2014–15. The High Court had quashed reassessment notices issued under Section 148 of the Income Tax Act, 1961.
The reassessment proceedings were initiated based on findings from surveys conducted in 2007 and 2019 involving entities of a group operating in India. The Revenue relied on these survey findings and earlier judicial observations to form a belief that income had escaped assessment in the relevant years. However, the High Court examined the reasons recorded for reassessment and found that they did not refer to any facts specific to the assessment years in question. It was noted that the Assessing Officer had merely reproduced findings from earlier surveys and assumed that the factual position remained unchanged.
The High Court emphasized that reassessment must be based on application of mind to facts relevant to the specific assessment years. It observed that there was no material demonstrating that the conditions prevailing during the years under consideration were identical to those identified in the earlier surveys. The Court rejected the Revenue’s contention that reassessment could be based on assumptions that facts continued unchanged.
