Facts of the Case

The petitioner, Fosun Pharma Industrial Pte. Ltd., challenged the show cause notice dated 30.03.2025 issued under Section 148A(1) of the Income-tax Act, the order dated 28.06.2025 passed under Section 148A(3), and the consequent reassessment notice dated 28.06.2025 issued under Section 148 for Assessment Year 2019–20. The basis of reopening was an allegation that the petitioner had received an amount of ₹43,24,65,18,408 during AY 2019–20. The petitioner contended that no such transaction had taken place in AY 2019–20 and that the transaction, if any, pertained to AY 2018–19.

Issues Involved

Whether reassessment proceedings could be sustained where the alleged escapement of income pertained to an incorrect assessment year, whether the order passed under Section 148A(3) suffered from perversity for proceeding on an incorrect factual premise, and whether the matter should be remanded to the Assessing Officer for fresh consideration.

Petitioner’s Arguments

The petitioner submitted that the reassessment proceedings were initiated on a fundamentally erroneous assumption that a transaction occurred in AY 2019–20, whereas no such transaction had taken place in that year. It was argued that initiation of proceedings on a wrong factual premise rendered the order under Section 148A(3) and the consequent notice under Section 148 unsustainable in law. The petitioner undertook to place all relevant documents before the Assessing Officer to demonstrate the correct assessment year of the transaction.

Respondent’s Arguments

The Revenue contended that in the reply filed by the petitioner to the show cause notice under Section 148A(1), the petitioner had merely denied the transaction without explaining that the transaction related to a different assessment year. It was argued that due to lack of supporting documents, the Assessing Officer proceeded on the basis of information available with the Department. The Revenue fairly submitted that the matter could be remanded to the Assessing Officer if the petitioner furnished complete documentation.

Court Order / Findings

The Delhi High Court observed that the reassessment proceedings proceeded on the premise that the transaction occurred in AY 2019–20, whereas the petitioner now asserted that the transaction pertained to AY 2018–19. The Court noted that this specific clarification was not adequately placed before the Assessing Officer earlier. In the interest of justice, and upon consensus of both parties, the Court held that the appropriate course was to set aside the impugned order under Section 148A(3) and the consequent notice under Section 148, and to remand the matter to the Assessing Officer for fresh consideration after examining the documents to be furnished by the petitioner.

Important Clarification

The Court clarified that the Assessing Officer shall grant the petitioner an opportunity of hearing and pass a reasoned order after examining the documents placed on record. The remand was confined to examination of the correct assessment year of the alleged transaction, and the Assessing Officer was directed to proceed strictly in accordance with law.

Final Outcome

The writ petition was disposed of. The impugned order dated 28.06.2025 passed under Section 148A(3) of the Income-tax Act and the reassessment notice dated 28.06.2025 issued under Section 148 for Assessment Year 2019–20 were set aside. The matter was remanded to the Assessing Officer for fresh consideration after granting opportunity of hearing to the petitioner and upon submission of necessary documents within the stipulated time.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769502458_FOSUNPHARMAINDUSTRIALPTE.LTDVsASSISTANTDEPUTYCOMMISSIONEROFINCOMETAXANR..pdf 

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