2025 (3) TMI 883 - SCH - Income Tax

Reopening of assessment - initiation of reassessment action in the second round - reason to believe - whether the undertaking by the petitioner constituted a corporate guarantee or a mere obligation ? The subject-matter of challenge before the High Court 2025 (3) TMI 813 - DELHI HIGH COURT was the notice for re-assessment for the assessment years 2008-2009. Short question that fell for the consideration of the High Court while deciding the petition was whether the undertaking furnished by the petitioner herein would amount to a corporate guarantee or a mere obligation and which could be viewed as an international transaction. This issue is kept open for assessee to be canvassed before the assessing officer in accordance with law. No reason to interfere with the impugned order passed by the High Court. Special Leave Petition is accordingly dismissed. All other contentions available to the petitioner are also kept open to be canvassed before the AO.

Summary

In the Supreme Court case presided over by HON'BLE MR. JUSTICE J. B. PARDIWALA and HON'BLE MR. JUSTICE R. MAHADEVAN, the Court addressed an exemption application, which was allowed. The core issue before the High Court involved a notice for re-assessment for the assessment year 2008-2009. The central question was whether the undertaking by the petitioner constituted a "corporate guarantee" or a "mere obligation," potentially classifying it as an international transaction. The Court decided not to interfere with the High Court's order and dismissed the Special Leave Petition. The Court left open the possibility for the petitioner to present arguments regarding the issue before the assessing officer. All pending applications were disposed of.