2025 (4) TMI 1139 - SC - Income Tax

Ex-parte order passed by High court - reopening of assessment - Entitlement to exemption under Sections 11 and 12 - HELD THAT - We take notice of the fact that after the impugned order came to be passed by the High Court the petitioner preferred a review petition trying to make good his case that in fact there was no service effected of the notice issued by the High Court. We are of the view that as the review petition is pending before the High Court we should not say anything further in the matter. Let the High Court look into the review petition and take an appropriate decision in accordance with law. In the event if the order is adverse to the petitioner it shall be open for him to avail appropriate legal remedy before the appropriate forum in accordance with law. Since demand has already been raised and there is some urgency we request the High Court to take up the review petition and see to it that the same is disposed of on its own merits within a period of four weeks from today.

Summary

The Supreme Court, in a petition arising from the Delhi High Court's judgment dated 03.07.2024 (Income Tax Appeal No. 721/2023), addressed the issue of the High Court proceeding ex-parte against the petitioner-assessee despite service of notice. The High Court had observed that "despite service being effected on the assessee, nobody had entered appearance," leading to its ex-parte order setting aside the ITAT's favorable order for the petitioner.The petitioner contended that no proper service was effected. The Supreme Court noted that a review petition challenging the service and the ex-parte order is pending before the High Court. The Court refrained from commenting further, directing the High Court to decide the review petition "in accordance with law" within four weeks, given the urgency due to raised demand.The Supreme Court disposed of the petition, leaving open the petitioner's right to pursue further legal remedies if the review is decided adversely. The Court emphasized procedural propriety and the need for the High Court to reconsider the service issue on its merits.