The Supreme Court of India on Monday refused to intervene in the Bombay High Court’s decision that quashed income tax reassessment proceedings against Bharat Petroleum Corporation Ltd. (BPCL) for the assessment year 2013–14. The reassessment involved ₹37.10 crore dividend income received through a trust structure.
A Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe dismissed the Special Leave Petition (Diary No. 8091 of 2026) filed by the Income Tax Department, noting that a prior Supreme Court ruling on the same issue had already been dismissed.
Background of the Case
BPCL, a public sector oil marketing company, claimed exemption on certain dividend income it received through the Bharat Petroleum Corporation Ltd. Trust for Investment in Shares (BPCL Trust). The company established the trust following the amalgamation of Kochi Refineries Limited with BPCL in 2006, and BPCL remained its sole beneficiary. The trust held BPCL shares issued under the merger scheme.
For the assessment year 2013–14, BPCL filed its return of income on 22 November 2013, reporting total income of approximately ₹3,533 crore, which included dividend income of ₹179.44 crore, with ₹37.10 crore coming from the BPCL Trust. BPCL claimed exemption on this dividend under the Income Tax Act, 1961.
Reassessment Proceedings
The Assessing Officer completed scrutiny and passed the assessment order on 30 January 2017, reviewing the exemption claim and applying certain disallowances.
On 23 March 2021, the Income Tax Department issued a notice underSection 148, arguing that the dividend from the BPCL Trust did not qualify as an exempt dividend because the trust did not qualify as a company under Section 115-O of the Act.
BPCL submitted objections on 18 June 2021, asserting that it had already disclosed all material facts regarding the trust and dividend income during the original assessment. The Department rejected the objections on 17 February 2022, prompting BPCL to approach the Bombay High Court.
Bombay High Court Ruling
On 3 July 2025, the Bombay High Court ruled that the reopening was unsustainable, emphasizing that BPCL disclosed all material facts in the original assessment. The Court further clarified that the reassessment relied solely on a change of opinion, which does not justify reopening. The High Court therefore quashed the Section 148 notice.
Supreme Court Decision
The Income Tax Department challenged the High Court’s ruling through a Special Leave Petition.
The Supreme Court Bench dismissed the appeal, upholding the Bombay High Court’s decision and confirming that the reassessment notice against BPCL was invalid.
Case Details
Case Title: Assistant Commissioner of Income Tax v. Bharat Petroleum Corporation Ltd
Case Number: Diary No. 8091 of 2026.
Also Read: Judicial Practice Rule: Law Colleges Seeks PWD Relief.
