Dalmia Power Limited Vs ACIT (Supreme Court of India)
The Supreme Court considered an interlocutory application arising from proceedings connected with reassessment notices issued under the Income Tax Act, 1961, following a High Court judgment that had allowed writ petitions and quashed such reassessment proceedings. The Supreme Court noted that it had already stayed the High Court’s order dated 23.04.2025 and clarified that, in view of this stay, all further proceedings pursuant to a subsequent penalty notice dated 14.11.2025 issued under Section 272A of the Act would also remain stayed.
The background to the dispute lies in reassessment proceedings initiated for the assessment year 2011–12 against three companies following a search under Section 132. Original assessments under Section 153A read with Section 143(3) were completed in 2014 and attained finality in 2015 after appellate proceedings. Subsequently, in March 2018, based on information received from the investigation wing alleging escapement of income linked to an equity investment and its later buyback at a significantly higher valuation, the Assessing Officer issued notices under Section 148 after obtaining approval under Section 151.
The High Court, by a common order dated 30.10.2019, allowed the writ petitions filed against the reassessment proceedings, holding that there was no failure on the part of the assessees to disclose fully and truly all material facts, and that reopening beyond four years amounted to a mere change of opinion. The Revenue challenged this decision in writ appeals.
