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Vardhman Financial Services Private Limited vs. Income Tax Officer, Ward 26(1), Delhi & Anr.

Writ Petition (Civil) · 2026:DHC:7789-DBDecided 10 Sept 2026New Delhi Bench
W.P.(C) 15415/2022CNR: DLHC010416972022
Justice Dinesh Mehta · Justice Rajneesh Kumar Gupta

Background

The tax department issued reassessment notices to both parties in a share transaction, the buyer, Vardhman Financial Services, and the seller, Real Worth India, but its own stated positions on the correct share price directly contradicted each other: it claimed the seller had undervalued the shares while separately claiming the buyer had overvalued the very same shares. The Court had earlier stayed both notices, pointing out this contradiction and asking the department to sort out its position.

Decision Breakdown

After the department took instructions, its own counsel informed the Court that it had decided to drop the reassessment proceedings against Vardhman Financial Services (the buyer), while keeping open its right to continue examining the matter against the seller, Real Worth India, separately. Based on this concession, the Court quashed the reassessment notice issued to Vardhman for the 2014-15 assessment year and allowed the petition.

Lesson Learnt

If a tax department's reassessment claims against two connected parties in the same transaction are internally contradictory, the department can be pressed to resolve the inconsistency, and a taxpayer facing an internally inconsistent claim has a strong basis to have the notice against them dropped.

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