Delhi High Court suspends reopening of income tax assessment keeping in mind BHEL credentials


the Delhi High Court bench Judge Manmohan and Judge Dinesh Kumar Sharma suspended the reopening of income tax assessments, given references from Bharat Heavy Electricals Limited (BHEL).

BHEL, the petitioner, challenged the order issued under section 148A(d) and the notice issued under section 148 of the Income Tax Act 1961 for the year of tax 2018-2019.

Section 148 of the Income Tax Act deals with the issuance of a notice if income has escaped recalculation or assessment.

BHEL maintained that it was a reputable PSU that had achieved “Maharatna” status in the past. It was under the direct supervision of the Union government and had strict internal controls. BHEL returned revenue of Rs. 1,707 crores for the 2018-19 valuation year.

BHEL argued that it had been subject to a double audit under the Companies Act as well as by the CAG and was given a voucher for the 2018-19 valuation year. A full review assessment has been completed for the petitioner for the assessment year in question.

The court, while granting a stay of reassessment proceedings, noted that it was highly unlikely that the petitioner was involved in input tax credit fraud, as alleged by the department.

Case title: Bharat Heavy Electricals Limited v PCIT

Quote: WP(C) 6482/2022 & CM APPL.19664/2022

Date: 25.04.2022

Applicant’s lawyer: Lawyer Piyush Kaushik

Counsel for the Respondent: Lawyer Sanjay Kumar

Click here to read/download the order

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