The Kerala High Court on Monday temporarily paused assessment proceedings initiated by the Income Tax Department against Sreedhanya Construction Company, a Trivandrum-based firm, after the company challenged the validity of a scrutiny notice issued under Section 143(2) of the Income Tax Act. The court’s brief but significant intervention has given the company breathing room while the tax authorities prepare their response.
Background
Sreedhanya Construction received a scrutiny notice dated 26 June 2025 for the assessment year 2024–25, prompting it to approach the High Court. The company argued that the notice was issued without proper jurisdiction and in disregard of earlier circulars and tribunal orders relied upon in similar cases. Their counsel pointed out that multiple tribunal rulings across Delhi and Kolkata benches had given differing interpretations, and that uniformity was necessary to avoid arbitrary treatment.
During the hearing, lawyers representing the construction firm emphasized that without interim protection, the department could move ahead with assessment, potentially leading to adverse financial implications.
Court’s Observations
Justice Ziyad Rahman A.A., who presided over the bench, did not go into the merits of the dispute at this stage. Instead, the court noted that the government counsel required time to obtain clear instructions from the Income Tax Department and the Central Board of Direct Taxes (CBDT).
“The bench observed, ‘Let the standing counsel take instructions first. Meanwhile, the assessment shall not be pushed forward,’” a lawyer present in the courtroom said after the order.
There was no heated exchange during the session; the tone remained procedural, with both parties acknowledging that the matter involved interpretation of statutory timelines and notice requirements.
Decision
In its short interim order, the High Court postponed the matter to 18 November 2025 and ordered that no further assessment proceedings shall be carried out until then.
The case will now return to the court once the tax authorities place their official position on record.
Case: Sreedhanya Construction Company v. Assistant Commissioner of Income Tax & Another
Court: High Court of Kerala, Ernakulam
Judge: Justice Ziyad Rahman A.A.
Case Type: Writ Petition (Civil)
Case Number: WP(C) No. 39722 of 2025
Petitioner: Sreedhanya Construction Company, Thiruvananthapuram
Respondents:
- Assistant Commissioner of Income Tax, Trivandrum
- Central Board of Direct Taxes (CBDT), New Delhi
Order Date: 03 November 2025