Supreme Court Upholds Cancellation of Income Tax Reassessment Notices to Reliance Projects [Read Order]

In a recent ruling, the Supreme Court of India dismissed the Special Leave Petition filed by the IncomeTax Department against Reliance Projects and Property Management Services Ltd., thereby affirming the Bombay High Court’s decision to quash reassessment proceedings for Assessment Year 2016–17.

The dispute arose when reassessment notices and orders were issued against the assessee, Reliance Projects. The company challenged these before the Bombay High Court, arguing that earlier judgments already settled the matter.

Counsel for Reliance pointed to two binding precedents in the High Court: Siemens Financial Services Pvt. Ltd. v. DCIT (2023) and Alok Industries Ltd. v. ACIT (2024)

In Siemens Financial Services, a case dealt with income tax reassessment proceedings. The company challenged the validity of reassessment notices issued under the Income Tax Act. The Bombay High Court held that such reassessment was not sustainable in law and quashed the notices.

Also in the Alok Industries Case (2024), the Court ruled that the Income Tax Department cannot initiate reassessment proceedings under Section 148 for periods preceding the approval of the resolution plan. Doing so would violate the finality granted under the IBC framework, which aims to provide a clean slate to the corporate debtor.

The High Court Division Bench of Justices K.R. Shriram and Dr. Neela Gokhale, therefore, quashed all impugned notices, assessment orders, and consequential proceedings.

In the Supreme Court proceedings, S. Dwarakanath, Additional Solicitor General, appeared for the petitioners representing the Income Tax Department, assisted by  Sudarshan Lamba,  S. Vijay Adthiya,  Udai Khanna, and  Sachin Sharma.

On behalf of the respondent, Reliance Projects and Property Management Services Ltd., appearances were entered by  K. R. Sasiprabhu, Advocate‑on‑Record, along with  Amit Mathur,  Chandrashekhara Bharathi, Pratik Shah, Tani Malik, and Vidhatri.

The Supreme Court Benchled by Justices J.B. Pardiwala and K.V. Viswanathan, found no good ground to interfere with the impugned order passed by the High Court.

The bench observed that, “having heard the learned counsel appearing for the petitioners and having gone through the materials on record, we find no good ground to interfere with the impugned order passed by the High Court.”

Accordingly, the special leave petition was disposed of

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