Supreme Court Dismisses Revenue SLP for Income Tax Reassessment on UK Grid for 267-Day Delay [Read Order]

In a recent ruling the Supreme Court of India has dismissed the Income Tax Department’s appeal against UK Grid Solutions Limited, upholding a Delhi High Court decision that quashed reassessment notices for the Assessment Years 2013–14 and 2014–15.

The case arose after the Income Tax Department issued reassessment notices to the assessee UK Grid Solutions Limited for Assessment Years 2013–14 and 2014-15. The department relied on surveys conducted in 2007 and 2019 on GE Group companies in India, assuming the company’s business model had remained unchanged. So UK Grid Solutions challenged these notices before the Delhi High Court.

The Delhi High Court, in its February 2025 judgment, had struck down reassessment proceedings initiated under both the old regime and the amended Section 148A(b) of the Income Tax Act, 1961. The High court found that the reassessment was based solely on surveys conducted in 2007 and 2019 on GE Group entities, without any fresh or year-specific facts to justify reopening the assessments.

The high court bench observed that each assessment year must be evaluated independently. It held that the Assessing Officer had merely extrapolated findings from past surveys and failed to demonstrate any application of mind to the facts of AYs 2013–14 and 2014–15. The court stated that the existence of a Permanent Establishment (PE) is a fact-specific inquiry and cannot be presumed across years without fresh evidence.

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Citing precedents including National Petroleum Construction Co. and Gupta Abhushan (P) Ltd., the High Court underscored that tax assessments are not bound by res judicata, but consistency must be balanced with factual accuracy. The court concluded that the reassessment notices dated 31 March 2021 and 30 June 2021 were legally unsustainable and set them aside.

The apex court, comprising Justices J.B. Pardiwala and K.V. Viswanathan, noted that “There is a gross delay of 267 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner”. Also the supreme court found no merit to interfere with the High Court’s order. While dismissing the appeal on both delay and substance, the bench clarified that the legal question remains open for future adjudication.

Accordingly, the application was disposed of .

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