Tax Relief
HC junks income tax dept's reassessment action against Maruti Suzuki
This story was originally published at 21:36 IST on 21 February 2025
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NEW DELHI – In a relief to Maruti Suzuki India Ltd., the Delhi High Court on Friday rejected the income tax department's reassessment action against the company for the assessment year 2010-11. The high court said that the decision to reopen clearly appeared to have been predicated solely on the basis of what the assessing officer came to hold in assessment year 2010-11.
Maruti Suzuki had computed its income at INR 12.63 billion for assessment year 2010-11. Thereafter in 2014, the tax department had passed a final assessment order computing the taxable income of Maruti Suzuki at INR 20.71 billion.
Maruti Suzuki had argued that Mar. 31, 2016 constituted the last date by which a reassessment action for assessment year 2009-10 could have been initiated in terms of the timelines provided in Section 149 of the 1961 Act. However, the income tax department issued a notice under Section 148, only on Apr. 1, 2016 and the same was barred by limitation, said Maruti Suzuki India.
The income tax department had said that it had received a letter from the additional commissioner of income tax stating four new issues had been identified in the assessment year 2010-11. The issues include non deduction of tax at source amounting to INR 1.95 billion on payments to Suzuki Motor Corp., taxation of share transactions as business income amounting to INR 1.29 billion, disallowance of claim under Section 35(2AB) amounting to INR 2.47 billion and disallowance of provision for warranty amounting to INR 210 million.
"Undisputedly, the last date for commencement of reassessment action for AY(assessment year) 2009-10 was Mar. 31, 2016. The notice impugned before us, as we have found, came to be issued thereafter. The reassessment action is thus liable to be struck down on this short ground alone," said the court in its order.
On Friday, the shares of Maruti Suzuki India Ltd. closed 0.9% lower at INR 12,323.45 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Deepshikha Bhardwaj
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