Delhi HC quashes Rs 2,000 crore tax reassessment notice against Maruti Suzuki

The Delhi High Court nullified an income tax reassessment notice issued on April 1, 2016 against Maruti Suzuki India Ltd., for the Assessment Year 2009-10, according to media reports.

The notice, brought forward by the Deputy Commissioner of Income Tax, was dismissed as time-barred—having missed the statutory deadline of March 31, 2016.

According to reports, the case centred on four issues identified during MSIL's subsequent AY 2010-11 assessment. The DCIT had contended that MSIL functioned as a Permanent Establishment of Suzuki Moto Corporation, failed to deduct Tax Deducted at Source on payments, misclassified share transactions as business income rather than capital gains, improperly claimed deductions under Section 35(2AB) for research and development, and mischaracterized warranty provisions as contingent liabilities.

MSIL maintained that all pertinent facts had already been disclosed during the original assessment, and the court found no merit in reopening the case.

Emphasizing that the reassessment was merely a "change of opinion" rather than a presentation of new evidence, Justices Yashwant Varma and Ravinder Dudeja criticized the Assessing Officer for not independently revisiting the facts of AY 2009-10 but instead relying on later findings.

Senior Advocate Ajay Vohra, supported by Advocates Vaibhav Kulkarni and Udit Naresh from Vaish Associates, successfully represented MSIL, leading to the quashing of the contentious reassessment notice.