Initiation of Reopening Proceedings under un-amended Provisions after Amendment: Supreme Court issues Notice to to Deloitte in Income Tax Dept SLP [Read Order]

The Supreme Court has issued notice to Deloitte Consulting India in a Special Leave Petition filed by the Income Tax Department in matters related to a Telangana High Court verdict that quashed the issuance of notice and reopening of proceedings under Section 148 of the Income Tax Act.

The petition arises from the final judgment and order dated 14-09-2023, in WP No. 3729/2023, passed by the High Court for the State of Telangana at Hyderabad.

The Telangana High Court had observed that, “For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-department is neither tenable, nor sustainable.

The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/ quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principle that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also get nullified automatically.”

Rupesh Kumar, Raj Bahadur Yadav, AOR, Shashank Bajpai, Kamal Kishore, Sarthak Karol, Vikrant Yadav, Prernaa Singh and Sunita Singh, Advocates appeared for the petitioner whereas the Respondent-Deloitte was represented by J.D. Mistry, Senior Advocate and Vishal Kalra, Advocate.

The petitions were called for hearing on February 23, 2024. After hearing the counsel, the Apex Court issued the following orders:

Delay was condoned, and notice was issued to the respondent, with Mr. Vishal Kalra, learned counsel, accepting the notice on behalf of the respondent in SLP(C) Dy. No. 6018/2024.

The Supreme Court's decision to grant hearing to a special leave petition in this tax dispute against Deloitte Consulting India Pvt. Ltd. sets the stage for further court proceedings.

This development will be closely monitored for its implications on taxation matters and the broader legal, finance and audit landscape.

To Read the full text of the Order CLICK HERE

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