Supreme Court Stays Madras HC Order Allowing Income Tax Reassessment Against Dalmia Bharat and Subsidiaries [Read Judgement]

In a recent development, the Supreme Court of India granted a stay in favour of Dalmia Bharat Limited and its subsidiaries, Dalmia Cement (Bharat) Limited and Dalmia Power Limited, against the judgment of the Division Bench of the Madras High Court dated April 23, 2025.

The stay was granted in Special Leave Petitions (SLPs) filed by the companies challenging the High Court's decision allowing the Income Tax Department to proceed with reassessment proceedings for the Assessment Year 2011-12.

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The reassessment proceedings were initially quashed by a Single Judge of the Madras High Court, Madurai Bench, through a detailed judgment dated October 30, 2019. The court found that the basis for invoking the extended time period under the Income Tax Act was not substantiated by the department. However, the Income Tax Department filed writ appeals against this ruling, which were allowed by the Division Bench in April 2025.

Aggrieved by this outcome, Dalmia Bharat and its subsidiaries approached the Supreme Court through SLPs seeking relief. The companies contended that the Division Bench had erred in reversing the well-reasoned judgment of the Single Judge and that the extended reassessment was not legally sustainable.

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At the hearing on May 30, 2025, a bench comprising Chief Justice, Justice Augustine George Masih, and Justice A.S. Chandurkar issued notice and granted an interim stay on the impugned High Court order. The court permitted the petitioners to serve notice via the Standing Counsel in addition to the usual modes and tagged the matter with a related pending SLP.

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This order effectively stopped the income tax reassessment proceedings against Dalmia Bharat and its subsidiaries until further directions are issued by the Supreme Court.

To Read the full text of the Judgement CLICK HERE

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