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Informist, Tuesday, Jul. 15, 2025

 

NEW DELHI – The Supreme Court on Tuesday issued a notice to the income tax department on Lodha Developers Ltd.'s plea against re-assessment notices by the department seeking to reopen the assessment of income for the assessment year 2009-10. In the meantime, the proceedings of reassessment against Lodha Developers should be continued, but shall not be finalised by the income tax department, said the apex court.

 

In 2016, the income tax department called upon Lodha Developers to file its return of income since the assessing officer had reasons to believe that income for the assessment year 2009-10 had escaped assessment. In the notice, the tax department alleged that the unsecured loan amounting to INR 4.03 billion received by Lodha Developers from Flirasca Holding Pvt. Ltd. was unexplained money, which had been routed through layering via various offshore entities located in tax haven countries, and these entities have an intimate connection with the petitioner and its directors. 

 

Thereafter, Lodha Developers filed its objections against the income tax department's notice. However, the assessing officer rejected the objections, and consequently, the company moved the high court and after no relief from the latter, approached the apex court. 

 

Lodha Developers had argued that it had given full disclosure of all facts regarding the loan and the same was evident from the assessment order passed by the income tax department that had earlier assessed its income in 2011. The petitioner argued that reassessment proceedings were initiated after the expiry of four years from the end of the relevant assessment year, and the original assessment was completed under Section 143(3) of the Income Tax Act, 1961 in 2011.

 

The 1961 Act provides that an assessment can be reopened after the expiry of four years from the end of the relevant assessment years in cases where the original assessment is done under Section 143(3) of the Act only if there is a failure on the part of assessee to disclose fully and truly all material facts necessary for the assessment. 

 

The income tax department said that subsequent to the assessment order passed in 2011, information was received that the loan transaction was not genuine and, therefore, the reopening proceedings were initiated against Lodha Developers. In April, the high court had ruled that the circuitous movement of funds through various companies located in tax havens had not been disclosed by Lodha Developers in the course of the original assessment proceedings.

 

At 1341 IST, the shares of Lodha Developers were trading up 0.8% at INR 1,430.60 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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