SC Declines to Interfere in Reopening Dispute; Revenue’s SLP Dismissed

The Assistant Commissioner of Income Tax (the Petitioner) filed a Special Leave Petition (SLP) challenging the judgment of the Bombay High Court dated July 3, 2025, in Writ Petition No. 2966/2022. The dispute originated when the Revenue issued notices under Section 148 to Bharat Petroleum Corporation Ltd. (BPCL) to reopen assessments for AY 2013-14 and AY 2014-15. The Assessing Officer (AO) alleged that BPCL had wrongly claimed exemptions under Section 10(34) on dividend income received from the ‘BPCL Trust for Investment in Shares’.

The AO contended that since the Trust was not a company, the income distributed did not qualify as exempt dividend under the Income Tax Act and that BPCL had failed to disclose material facts. BPCL challenged these notices, arguing that the reopening was based on a mere change of opinion and that all material facts had been disclosed during the original assessment.

Issue Before Court: Whether the Revenue was justified in reopening the assessment of BPCL under Section 147 of the Income Tax Act based on the taxability of distributions from a beneficiary trust, and whether the Supreme Court should exercise its jurisdiction under Article 136 to interfere with the High Court’s decision to quash said notices.

SC’s Decision: The Supreme Court dismissed the Special Leave Petition filed by the Revenue. The Bench, comprising Hon’ble Mr. Justice Pamidighantam Sri Narasimha and Hon’ble Mr. Justice Alok Aradhe, first condoned the delay in filing the petition (Diary No. 8091/2026).

However, on merits, the Court stated it was “not inclined to interfere with the impugned order” passed by the Bombay High Court. This dismissal effectively confirms the Bombay High Court’s stance that the reopening of assessments against BPCL was legally unsustainable. Consequently, the reassessment notices for the relevant assessment years remain quashed.

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