VARDHMAN FINANCIAL SERVICES PRIVATE LIMITED vs. INCOME TAX OFFICER, WARD 26 (1), DELHI & ANR.

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W.P.(C)/15415/2022HC DelhiDLHC01041697202210 September 2026Bench: HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA,HON'BLE MR. JUSTICE DINESH MEHTA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the writ petition filed by Vardhman Financial Services Private Limited stands allowed. This decision was based on the submission made by the Revenue's counsel, Mr. Puneet Rai, who, on instructions, stated that the respondents propose to drop the proceedings against Vardhman Financial Services Pvt. Ltd. Consequently, the notice dated 12.04.2021, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-15, and any proceedings in furtherance thereof, were quashed and set aside. The court did not decide on the merits of the share valuation dispute itself, but rather on the Revenue's subsequent decision to withdraw its action against the petitioner. The ratio decidendi is that when the Revenue concedes to dropping proceedings against an assessee, the related notices and actions are liable to be quashed.

What were the facts?

The petitioner, Vardhman Financial Services Private Limited, along with another entity, Real Worth India Pvt. Ltd., filed writ petitions challenging notices issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-2015. The core of the dispute involved the valuation of shares. The Revenue's stand was contradictory: for Real Worth India Pvt. Ltd., it argued the share price should have been Rs. 2,430 instead of the consensual issue price of Rs. 12,740; for Vardhman Financial Services Pvt. Ltd., it contended the claim value should have been Rs. 71,674 instead of Rs. 12,740. The High Court noted this contradiction and granted a stay on the impugned notices and proceedings. Subsequently, the Revenue, through its counsel, informed the court of its intention to drop the proceedings against Vardhman Financial Services Pvt. Ltd.

What were the issues?

1. Whether the contradictory stand of the Revenue regarding the valuation of shares for the petitioner and another entity, Real Worth India Pvt. Ltd., warrants interference by the High Court under its writ jurisdiction, concerning notices issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-2015? Assessee's Contention: The judgment does not explicitly record the assessee's arguments, but the petition itself challenges the Section 148 notices and proceedings. The factual context implies the assessee would argue against the validity of the notices due to the Revenue's inconsistent valuation approach. Revenue's Contention: The Revenue initially sought time to obtain instructions due to the contradiction in its stand regarding share valuation. Later, it submitted that it proposed to drop the proceedings against the petitioner, Vardhman Financial Services Pvt. Ltd., while reserving rights against Real Worth India Pvt. Ltd.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

W.P.(C) 15415/2022 Page 1 of 3 $~39 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 10.09.2026 Date of uploading: 15.09.2026 # CNR No. DLHC010416972022 + W.P.(C) 15415/2022 VARDHMAN FINANCIAL SERVICES PRIVATE LIMITED .....Petitioners Through: Mr. Salil Kapoor, Mr. Sumit Lalchandani, Ms. Ananya Kapoor, Mr. Tanmay Doneria and Mr. Utkarsa Gupta, Advocates. versus INCOME TAX OFFICER, WARD 26 (1), DELHI & ANR. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashwini Kumar & Mr. Rishabh Nangia, JSCs. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA J U D G M E N T DINESH MEHTA, J. (ORAL) 1. On 30.11.2022, Coordinate Bench of this Court had drawn the following proceedings: “2. The record shows that on 11.11.2022, when the matter was taken up by a coordinate bench, the following observations were made : “In W.P.(C) No.15475/2022 (Real Worth India Pvt. Ltd.) the stand of the respondent-Revenue is that the Digitally Signed By:NAVEEN KUMAR Signing Date:15.09.2026 16:26:32 Signature Not Verified

W.P.(C) 15415/2022 Page 2 of 3 share price should have been Rs.2,340/- [sic: Rs.2,430/-] and not Rs.12,740/- (which was the consensual issue price between the parties), whereas, in W.P.(C) No.15415/2022 (Vardhman Financial Services Pvt. Ltd.), it is the respondent-Revenue’s stand that the claim value of the same shares should have been Rs.71,674/- and not Rs.12,740/-. Since there is a contradiction in the stand of the Revenue, learned counsel for the respondents-Revenue prays for some time to obtain instructions.” 3. Mr. Puneet Rai, who appears on behalf of the respondents, in effect, the revenue, has returned with instructions. 3.1 It is not disputed by Mr Rai that the valuation accorded to the subject shares by the concerned assessing officer of the purchasing company, i.e., Vardhman Financial Services Pvt. Ltd. and that which was accorded by concerned assessing officer of seller company, i.e., Real Worth India Pvt. Ltd., is not aligned, as was noted by the court on 11.11.2022. 4. We would have expected the revenue to recall the impugned order and notices and to take next steps as may be permissible in law. 5. Since Mr Rai insists that he would want to file a counter-affidavit in W.P.(C) 15415/2022 & 15475/2022 the matter, the request is acceded to. 5.1 A counter-affidavit will be filed within four weeks from today. 5.2 Rejoinder thereto, if any, will be filed at least five days before the next date of hearing. 6. List the above-captioned matters on 17.03.2023. 7. In the meanwhile, there shall be a stay on the operation of the impugned notice dated 30.07.2022 issued under Section 148 of the Income Tax Act, 1961 [in short “Act”] concerning Assessment Year (AY) 2014-2015 and the proceedings triggered thereof, in respect of the petitioner in W.P.(C)No.15415/2022. 8. Likewise, there shall be a stay on the operation of the impugned notice dated 29.07.2022 issued under Section 148 of the Act Digitally Signed By:NAVEEN KUMAR Signing Date:15.09.2026 16:26:32 Signature Not Verified

W.P.(C) 15415/2022 Page 3 of 3 concerning AY 2014-2015 and the proceedings triggered thereof, in respect of the petitioner in W.P.(C)No.15475/2022.” 2. Mr. Puneet Rai, learned Senior Standing Counsel for the respondents on instructions received by him vide a e-mail dated 14.03.2024 submitted that the respondents propose to drop the proceedings in the case of Vardhman Financial Services Pvt. Ltd., however, while reserving their rights to continue the proceedings against Realworth India Pvt. Ltd. 3. In view of the aforesaid, the notice dated 12.04.2021 issue under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961) for the Assessment Year 2014-15 and any proceedings in furtherance thereof are hereby quashed and set aside. 4. Writ petition stands allowed accordingly. DINESH MEHTA (JUDGE) RAJNEESH KUMAR GUPTA (JUDGE) SEPTEMBER 10, 2026/sid Digitally Signed By:NAVEEN KUMAR Signing Date:15.09.2026 16:26:32 Signature Not Verified

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