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REPORTABLE 2026 INSC 1163 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 13953 OF 2026 (Arising out of Special Leave Petition (C) No. 20045 of 2019)

CHETAN SABHARWAL …APPELLANT VERSUS ASSISTANT COMMISSIONER OF …RESPONDENT INCOME TAX CIRCLE 28(1)

NEW DELHI WITH CIVIL APPEAL NO. 13954 OF 2026 (@SLP(C) No. 20535/2019)

CIVIL APPEAL NO. 13955 OF 2026 (@SLP(C) No. 21295/2019)

CIVIL APPEAL NO. 13956 OF 2026 (@SLP(C) No. 21242/2019)

J U D G M E N T

VISHAL ANAND Date: 2026.10.28 Reason:

J.B. PARDIWALA, J.:

For the convenience of exposition, this judgment is divided into the following parts:-

INDEX A. FACTUAL MATRIX ................................................................................................. 2 B. SUBMISSIONS ON BEHALF OF THE APPELLANTS ............................ 6 C. SUBMISSIONS ON BEHALF OF THE RESPONDENT .......................... 9 D. ISSUES FOR DETERMINATION................................................................... 11 E. ANALYSIS ................................................................................................................. 12 (I). WHETHER THE IMPUGNED NOTICE DATED 31.03.2015 REOPENING OF ASSESSMENTS OF THE APPELLANTS FOR THE AY 2008-09 AND AY 2009- 10 SATISFIES THE ANVIL OF “REASON TO BELIEVE” UNDER SECTIONS 147- 148 OF THE ACT AND, THUS, IS VALID? ....................................... 12 (a) Contours of the expression “reason to believe” under Sections 147 and

148 of the Act. ................................................................................... 17 (b) In-built test of “change of opinion” and its applicability to the facts of the present case. ............................................................................... 34 F. CONCLUSION ......................................................................................................... 52

1. Leave granted.

2. These connected appeals arise from the self same judgment and order dated 06.08.2019 passed by the High Court of Delhi in Writ Petition (C) No. 10898 of 2015 preferred by the appellant herein, by which the High Court dismissed the said writ petition and thereby upheld the reassessment proceedings initiated by the respondent- revenue under Sections 147 and 148 of the Income Tax Act, 1961 respectively (hereinafter referred to as “the Act”) in the case of the appellants for AY 2008-09 and AY 2009-10, respectively.

A. FACTUAL MATRIX

3. Mr. Chetan Sabharwal, the appellant-assessee herein, along with his brother – Mr. Nitin Sabharwal, the appellant-assessee in the connected matters, and two other shareholders, entered into two Share Purchase Agreements dated 19.10.2007 (“SPA”) with GYS Real Estate Pvt. Ltd/ (“Buyer Company”) for sale of 7.5 Lakh equity shares of one Pawan Impex (P.) Ltd. (“Company No. 1”) and of 2.5 Lakh equity shares of another SVIIT Software (P.) Ltd. (“Company No. 2”) held by each of the parties for a total sale consideration of Rs. 195 Crore and Rs. 60 Crore, respectively. The appellant and other selling shareholders were each entitled to 1/4th share of this total consideration. With respect to the company nos. 1 and 2, an amount of Rs. 110 Crore and Rs. 22.5 Crore, respectively, was received as advance during FY 2007-08/AY 2008-09 out of the sale consideration of Rs. 195 Crore and Rs. 60 Crore, respectively. The appellant’s 1/4^th share in this advance consideration amounted to Rs. 27.5 Crore and 5.62 Crore, respectively. Further, the buyer company made an additional payment of Rs. 18 Crore with respect to the sale of the company no. 2’s share. The appellant’s 1/4th share in this additional payment amounted to Rs. 4.5 Crore. Therefore, the total of the 1/4th share of the appellant in advance consideration and additional payment aggregated to an amount of Rs. 37.64 Crore.

4. On 25.09.2008, the appellant filed his ITR for AY 2008-09, declaring a loss of Rs. 90.37 Lakh, which was accompanied by the computation of total income along with