2025 (6) TMI 86 - SCH - Income Tax

Supreme Court Allows Alternative Service Methods and Stays Challenged Order, Providing Crucial Procedural Protections for Petitioner

M/s DALMIA POWER LIMITED Versus THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1 & ANR.

SC granted petitioner procedural liberties, including issuance of notice via dasti service and through Standing Counsel. The Court critically ordered a ... Validity of reopening of assessment - Reason to believe - Whether the AO was justified in proposing to reopen the search assessments earlier made beyond the period of four years? - As decided by HC [2025 (4) TMI 1495 - MADRAS HIGH COURT] we are satisfied that the materials relied on by the assessing officer prima facie indicate that KKR Mauritius Cement Investment Limited is a shell company. The scale of returns and the manner in which the transactions had been conducted also prima facie suggest round tripping. The assessing officer was justified in coming to the conclusion that the matter requires a deeper probe if the black money of the Dalmias was deployed in making the initial investment. Section 147 of the Income Tax Act was incorporated with a laudable objective. It intends to check escapement of income for the purpose of assessment HELD THAT:- In addition to the usual mode, liberty is granted to the petitioner(s) to serve notice through the Standing Counsel for the respondent(s). Until further orders, there shall be stay of the impugned order. The Supreme Court, comprising the Chief Justice and Justices Augustine George Masih and A.S. Chandurkar, issued an order granting the petitioner several procedural liberties. Key directives include: 'Issue notice,' permission for 'Dasti service,' and liberty to serve notice 'through the Standing Counsel for the respondent(s).' Critically, the Court ordered that 'until further orders, there shall be stay of the impugned order,' effectively suspending the challenged decision pending further proceedings.