Reopening beyond four years — how much are you actually required to have disclosed?
The primary facts, and no more. Disclosure of secondary facts is not required. But if the department wants to use an extended limitation window, it must say so in the notice or the reasons.
Decided by the Supreme Court (L. Nageswara Rao J and Deepak Gupta J) on 2020-04-03, reported as (2020) 424 ITR 607 (SC); 271 Taxman 1; 314 CTR 17; 116 taxmann.com 151 (SC); Civil Appeal No. 1008 of 2020. It bears on section 147, section 148, section 149(1)(c) of the Income Tax Act 1961, in Reassessment & Reopening matters.
Two practical rules come out of it. Primary facts are the limit of what you must disclose — and the department cannot quietly rely on a longer limitation period without telling you which provision it is using.
Binding on every court and authority in India.
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NDTV, an Indian company running television channels, filed its return for assessment year 2008-09. NNPLC, an indirect subsidiary incorporated in the United Kingdom, raised US $100 million by issuing step-up coupon convertible bonds, redeemable at a premium after five years but in fact redeemed early at a discount. The Assessing Officer did not doubt the validity of the transaction but took the view that the subsidiary could not have raised such a sum without the parent's assurance, and by order dated 3 August 2012 imposed a guarantee fee at 4.68 per cent, adding Rs 18.72 crores to NDTV's income. On 31 March 2015 the revenue issued a notice under s.148 giving no reasons; reasons were supplied on 4 August 2015, the principal one being that for the following year, 2009-10, the Assessing Officer had proposed an addition of about Rs 642 crores on account of monies raised by the subsidiaries.
The appeal was allowed. The Court framed three questions (para 11). On the first, it held there were reasons to believe that income had escaped assessment, so the notice was not bad on that ground - this went against the assessee (para 23). On the second, the assessee had disclosed the issue of the US $100 million bonds, the entities that subscribed and the fact that they were discounted, all before the original assessment was finalised, so it could not be said that it had withheld any material information (para 29). On the third, neither the notice nor the reasons invoked the second proviso to s.147, so the revenue could not be permitted at the stage of the High Court proceedings to claim the benefit of the sixteen-year limitation (para 43). Since the revenue failed to show non-disclosure, the notice issued more than four years after the end of the assessment year was quashed. The Court expressed no opinion on whether the second proviso could be invoked on these facts and left the revenue free to issue a fresh notice under it if otherwise permissible, both sides being at liberty to raise all contentions on the validity of any such notice (para 44).
The fact that the original assessment was detailed and made under scrutiny does not take away the power to issue a notice under s.147 (para 12). At the notice stage the Court is not going into the merits but only whether the revenue has sufficient reason to believe income has escaped assessment (para 13). On full and true disclosure the Court applied Calcutta Discount Co. Ltd.: the duty is to disclose primary facts, and NDTV had disclosed the bond issue, the subscribing entities and the discounted redemption, all of which the Assessing Officer had accepted while adding only a guarantee fee (paras 29, 32). On the second proviso, the Court held that if the revenue wished to rely on it and on the sixteen-year period, the assessee had to be put to notice of that in the notice itself or at least in the reasons supporting it; the assessee could not be taken by surprise at the stage of rejection of its objections or before the High Court, and would otherwise lose the chance to show that it derived no income from a foreign asset or that the asset was not its own. Even leaving aside the High Court's ground that the revenue cannot take a fresh ground, the notice and reasons did not conform to the principles of natural justice (paras 41-43).
Without saying anything further on merits of the transaction we are of the view that it cannot be said that the assessee had withheld any material information from the revenue.
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Handle my notice → Ask a CA on WhatsAppThe primary facts, and no more. Disclosure of secondary facts is not required. But if the department wants to use an extended limitation window, it must say so in the notice or the reasons. This was decided by the Supreme Court (L. Nageswara Rao J and Deepak Gupta J) and bears on section 147, section 148, section 149(1)(c) of the Income Tax Act 1961. It is reported as (2020) 424 ITR 607 (SC); 271 Taxman 1; 314 CTR 17; 116 taxmann.com 151 (SC); Civil Appeal No. 1008 of 2020. Two practical rules come out of it. Primary facts are the limit of what you must disclose — and the department cannot quietly rely on a longer limitation period without telling you which provision it is using. If it applies to you, the first step is this: Show what was actually filed and answered at the original assessment; primary facts disclosed is the whole defence.
NDTV, an Indian company running television channels, filed its return for assessment year 2008-09. NNPLC, an indirect subsidiary incorporated in the United Kingdom, raised US $100 million by issuing step-up coupon convertible bonds, redeemable at a premium after five years but in fact redeemed early at a discount. The Assessing Officer did not doubt the validity of the transaction but took the view that the subsidiary could not have raised such a sum without the parent's assurance, and by order dated 3 August 2012 imposed a guarantee fee at 4.68 per cent, adding Rs 18.72 crores to NDTV's income. On 31 March 2015 the revenue issued a notice under s.148 giving no reasons; reasons were supplied on 4 August 2015, the principal one being that for the following year, 2009-10, the Assessing Officer had proposed an addition of about Rs 642 crores on account of monies raised by the subsidiaries. The matter was decided on 2020-04-03 by the Supreme Court (L. Nageswara Rao J and Deepak Gupta J). On those facts the Supreme Court held as follows. The appeal was allowed. The Court framed three questions (para 11). On the first, it held there were reasons to believe that income had escaped assessment, so the notice was not bad on that ground - this went against the assessee (para 23). On the second, the assessee had disclosed the issue of the US $100 million bonds, the entities that subscribed and the fact that they were discounted, all before the original assessment was finalised, so it could not be said that it had withheld any material information (para 29). On the third, neither the notice nor the reasons invoked the second proviso to s.147, so the revenue could not be permitted at the stage of the High Court proceedings to claim the benefit of the sixteen-year limitation (para 43). Since the revenue failed to show non-disclosure, the notice issued more than four years after the end of the assessment year was quashed. The Court expressed no opinion on whether the second proviso could be invoked on these facts and left the revenue free to issue a fresh notice under it if otherwise permissible, both sides being at liberty to raise all contentions on the validity of any such notice (para 44).
The fact that the original assessment was detailed and made under scrutiny does not take away the power to issue a notice under s.147 (para 12). At the notice stage the Court is not going into the merits but only whether the revenue has sufficient reason to believe income has escaped assessment (para 13). On full and true disclosure the Court applied Calcutta Discount Co. Ltd.: the duty is to disclose primary facts, and NDTV had disclosed the bond issue, the subscribing entities and the discounted redemption, all of which the Assessing Officer had accepted while adding only a guarantee fee (paras 29, 32). On the second proviso, the Court held that if the revenue wished to rely on it and on the sixteen-year period, the assessee had to be put to notice of that in the notice itself or at least in the reasons supporting it; the assessee could not be taken by surprise at the stage of rejection of its objections or before the High Court, and would otherwise lose the chance to show that it derived no income from a foreign asset or that the asset was not its own. Even leaving aside the High Court's ground that the revenue cannot take a fresh ground, the notice and reasons did not conform to the principles of natural justice (paras 41-43). In the words reproduced by the source cited on this page: "Without saying anything further on merits of the transaction we are of the view that it cannot be said that the assessee had withheld any material information from the revenue." The decision followed or applied Calcutta Discount Co. Ltd. v. ITO AIR 1961 SC 372 - followed (para 32); New Delhi Television Ltd. v. Dy. CIT [2017] 84 taxmann.com 136 / [2018] 405 ITR 132 (Delhi) - set aside; Mohinder Singh Gill v. Chief Election Commissioner [1978] 2 SCR 272 - considered (para 39); Phool Chand Bajrang Lal v. ITO [1993] 69 Taxman 627 / 203 ITR 456 (SC) - considered (para 21).
It was decided by the Supreme Court on 2020-04-03 and is reported as (2020) 424 ITR 607 (SC); 271 Taxman 1; 314 CTR 17; 116 taxmann.com 151 (SC); Civil Appeal No. 1008 of 2020. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 147, section 148, section 149(1)(c), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. The appeal was allowed. The Court framed three questions (para 11). On the first, it held there were reasons to believe that income had escaped assessment, so the notice was not bad on that ground - this went against the assessee (para 23). On the second, the assessee had disclosed the issue of the US $100 million bonds, the entities that subscribed and the fact that they were discounted, all before the original assessment was finalised, so it could not be said that it had withheld any material information (para 29). On the third, neither the notice nor the reasons invoked the second proviso to s.147, so the revenue could not be permitted at the stage of the High Court proceedings to claim the benefit of the sixteen-year limitation (para 43). Since the revenue failed to show non-disclosure, the notice issued more than four years after the end of the assessment year was quashed. The Court expressed no opinion on whether the second proviso could be invoked on these facts and left the revenue free to issue a fresh notice under it if otherwise permissible, both sides being at liberty to raise all contentions on the validity of any such notice (para 44). It arises in Reassessment & Reopening matters, on section 147, section 148, section 149(1)(c) of the Income Tax Act 1961, and was decided by L. Nageswara Rao J and Deepak Gupta J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Check whether the notice or the reasons identify the limitation provision relied on; silence there is a ground. Do not treat a detailed original assessment as protection by itself — the Court expressly said it is not.
Still good law. Sets aside the Delhi High Court order below, and the itatonline digest records no adverse treatment. The limitation architecture it applied — four, six and sixteen years under the old ss.147 and 149 — has since been replaced by the Finance Act 2021 regime, so the timing rulings are regime-specific even though the primary-facts principle survives. That finding was checked against a published source, which is linked on this page, on 2026-08-25. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read the outcome carefully. The assessee lost the first question: the Court held the revenue did have reason to believe income had escaped assessment (para 23), so this is not authority that the reopening was baseless. It won on the second and third - no failure to disclose primary facts, and the second proviso could not be invoked for the first time in the High Court. The relief also came with a caveat: the Court expressly left the revenue free to issue a fresh notice under the second proviso if otherwise permissible, expressing no view on whether it could (para 44). This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed. The Court framed three questions (para 11). On the first, it held there were reasons to believe that income had escaped assessment, so the notice was not bad on that ground - this went against the assessee (para 23). On the second, the assessee had disclosed the issue of the US $100 million bonds, the entities that subscribed and the fact that they were discounted, all before the original assessment was finalised, so it could not be said that it had withheld any material information (para 29). On the third, neither the notice nor the reasons invoked the second proviso to s.147, so the revenue could not be permitted at the stage of the High Court proceedings to claim the benefit of the sixteen-year limitation (para 43). Since the revenue failed to show non-disclosure, the notice issued more than four years after the end of the assessment year was quashed. The Court expressed no opinion on whether the second proviso could be invoked on these facts and left the revenue free to issue a fresh notice under it if otherwise permissible, both sides being at liberty to raise all contentions on the validity of any such notice (para 44).
TaxSphere, “New Delhi Television Ltd v DCIT”, https://taxnotice.vittsphere.com/caselaw/case/ndtv-v-dcit/ (validity last checked 2026-08-25)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
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The only thing behind my reopening notice is the Valuation Officer's report. Is that enough?
My return was only processed under 143(1). Does that stop the department reopening it later?
I made unexplained investments after the close of my accounting year. Which year can the officer tax them in, and can he reopen an earlier year to do it?
How much am I actually required to disclose — and can they reopen because the officer drew the wrong conclusion?
