BPTP Limited: Supreme Court Upholds Delhi HC Ruling on Reassessment Reopening

PCIT (Central III) & Anr. Vs BPTP Limited (Supreme Court of India)

Background and High Court Proceedings

BPTP Limited, a real-estate company, had its assessments for AY 2012-13 and AY 2013-14 completed under Section 143(3) of the Income Tax Act. During the original assessment proceedings, the Assessing Officer had sought information relating, inter alia, to TDS, project-wise costs and Government dues, including External Development Charges (EDC) paid to the Haryana Urban Development Authority (HUDA).

After more than four years from the end of the relevant assessment years, notices under Section 148 were issued proposing reassessment. The recorded reasons proceeded on the basis that EDC payments to HUDA were subject to TDS and that failure to deduct TDS attracted disallowance under Section 40(a)(ia). The assessee challenged the reopening before the Delhi High Court.

The assessee contended that the relevant EDC and TDS information had already been disclosed during the original scrutiny assessments and that reopening after four years was therefore barred by the proviso to Section 147. It also contended that the Assessing Officer had incorrectly invoked Section 194, which concerns dividends, and that EDC was a statutory charge rather than a payment subject to TDS.

The Revenue argued that the writ petitions should not be entertained at the stage of initiation of reassessment proceedings because statutory remedies were available. On merits, it contended that EDC payments could attract TDS and that merely referring to an incorrect statutory provision would not invalidate the reopening if the power otherwise existed in law.