SC clears tax probe against two sons of ex-CJI YK Sabharwal
· India · Hindustan Times, The Hindu, Times of India
The Supreme Court dismissed appeals by Chetan and Nitin Sabharwal, allowing the Income Tax Department to reassess them for 2008-09 and 2009-10 based on a 2015 notice citing share deals that funded a 2010 Delhi property purchase. A bench of Justices JB Pardiwala and K Vinod Chandran upheld the reassessments, saying the notice had a valid "reason to believe" under the Income Tax Act and the director general's probe gave tangible material for the Assessing Officer. The judgment reiterated that the officer does not need to prove the exact escapement of income and rejected the argument that overvaluation cannot lead to tax evasion. The brothers and two others sold shares of Pawan Impex Ltd and SVIIT Software Ltd to GYS Real Estate Pvt Ltd in October 2007 for ₹195 crore and ₹60 crore respectively. The ruling opens the door for the tax department to pursue assessments that were previously stalled by the Sabharwals' legal challenges. It reinforces the principle that a reasonable belief based o
Why it matters
The decision directly impacts Chetan and Nitin Sabharwal by permitting the tax department to reassess their income for 2008-09 and 2009-10, potentially resulting in significant tax liabilities. It also clarifies the legal standards for reassessment notices, affecting future income‑tax inquiries involving similar share‑transaction structures.
Read the original report — Hindustan Times
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