DCIT Vs RRPR Holdings Private Limited (Supreme Court of India)
The matter concerns reassessment proceedings initiated for Assessment Year 2010–11 under Section 148 of the Income-tax Act and subsequent judicial scrutiny by the Delhi High Court and the Supreme Court. The petitioner challenged the reassessment notice dated 23 March 2015, the order rejecting objections, and the continuation of reassessment proceedings, along with a request to restrain further inquiries.
The reassessment was based on allegations relating to a transaction involving acquisition of 7.5% shareholding in New Delhi Television Limited through a loan agreement dated 21 July 2009 with another entity. It was admitted that the loan proceeds were used to repay outstanding loans owed to ICICI Bank. However, the Assessing Officer alleged that the loan was effectively consideration for transfer of 26% shares.
Read HC Judgment in this case: Reassessment Notice Quashed Due to Incorrect Assumption of Share Transfer: Delhi HC
The Delhi High Court examined the material and found that the core allegation forming the basis of reassessment was factually incorrect. It was conceded that the shares acquired by the petitioner continued to be held in its own name and had never been transferred to the lender entity. As the reassessment proceedings were founded on an incorrect factual premise, the Court held that the notice under Section 148 could not be sustained and accordingly quashed it. Additionally, in a connected matter, the protective order was also set aside as it could not survive once the reassessment notice was invalidated.
