The Delhi High Court has quashed income-tax reassessment proceedings after the department told the court that it proposed to drop the case and the dispute had drawn the court’s attention because the tax authorities had taken sharply different positions on the value of the same shares in proceedings concerning the buyer and the seller.

The bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta recorded the department’s statement that it would drop proceedings against Vardhman, while reserving its right to continue proceedings against the seller.

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The valuation conflict was identified during an earlier hearing involving both companies. In the seller’s case, the Revenue’s position was that the share price should have been ₹2,430 rather than the ₹12,740 issue price agreed between the parties. In Vardhman’s case, however, the Revenue contended that the value of those same shares should have been ₹71,674, again instead of ₹12,740.

A coordinate Bench noted that the valuations adopted by the assessing officers dealing with the purchasing and selling companies did not align. It said it would have expected the Revenue to recall the challenged order and notices and then take any further steps permissible under law. The Revenue sought time to file a counter-affidavit, and the court stayed the reassessment notices and proceedings concerning both companies in the meantime.

The department stated, on the basis of instructions received by email that the department proposed to drop the proceedings against Vardhman. The counsel expressly reserved the department’s position in relation to Real Worth India.

The High Court quashed the Section 148 notice against Vardhman for AY 2014–15 and all proceedings arising from it. The operative part of the September 2026 judgment identifies the quashed notice as dated April 12, 2021. The earlier proceedings reproduced in the judgment refer to a July 30, 2022 Section 148 notice against Vardhman that had been stayed. The judgment does not explain the difference between those two dates.

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