Supreme Court Dismisses Income Tax Appeal Against IDBI Bank Over Delay Of 275 Days

The High Court, in its order dated March 24, 2025 held that the reasons recorded by the Assessing Officer were factually incorrect, reflected non-application of mind, and amounted to an impermissible review based on change of opinion.

A Bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe dismissed the petition over 275 days delay.

The case arose after IDBI Bank Ltd challenged a reassessment notice issued by the Income Tax Department under Section 148 of the Income Tax Act for AY 2016-17. The bank had originally filed its return declaring a loss of about Rs. 669 crores, following which scrutiny assessment was completed on December 29, 2018.

Later, on March 27, 2021, the department sought to reopen the assessment alleging escaped income relating to MAT computation, wage revision provisions, interest on non-performing investments and deductions under Section 36(1)(viia).

IDBI Bank contended that the reopening was based on factually incorrect reasons and issues that had already been examined during the original assessment and appellate proceedings.

The Bombay High Court quashed the reassessment proceedings, holding that even the basic figures relating to IDBI Bank's returned income, deductions and computation were wrongly recorded by the Assessing Officer while reopening the assessment. It found that all the issues cited for reopening, including MAT computation, wage revision provisions, interest on non-performing investments had already been examined during the original scrutiny assessment and appellate proceedings.