The Delhi High Court has granted interim protection to Singapore-based maritime law firm Holman Fenwick Willan Singapore LLP, restraining the Income Tax Department from taking coercive action to recover tax dues arising from an assessment order passed against the firm.
The dispute centres on the department’s decision to assess the firm’s income despite its alleged absence of any business establishment or physical presence in India.
A Division Bench comprising Justice Dinesh Mehta and Justice Aditi Choudhary passed the interim order on October 16 after the firm challenged an assessment order dated May 9, 2025, a penalty order dated December 24, 2025, and a consequential demand notice issued on the same day.
Representing the Singapore law firm, advocate Vibhooti Malhotra submitted that the firm had never operated from India and had not even applied for a Permanent Account Number (PAN). Despite this, the Income Tax Department allegedly allotted a PAN to the firm on its own and initiated assessment proceedings without bringing the matter to its knowledge.
The firm contended that the assessment and subsequent penalty proceedings were initiated despite the absence of any Indian presence, raising questions about the basis on which the tax authorities proceeded against it.
Taking note of the submissions, the High Court directed the Income Tax Department not to initiate coercive recovery measures in connection with the disputed assessment.
“The respondents shall not take any coercive measure for recovery of the demand raised by assessment order dated 09.05.2025 and consequential demand notice dated 24.12.2025 issued to the petitioner,” the Bench ordered.
The Court also directed Puneet Rai, Senior Standing Counsel appearing for the Income Tax Department, to obtain instructions and submit a short counter-affidavit within three weeks.
The matter is scheduled to come up for further hearing on November 18.
Advocates Bhuvnesh Satija and Aniket Khanduri also appeared for the law firm, while Junior Standing Counsel Ashwini Kumar and Rishabh Nangia represented the Income Tax Department.
The interim protection will remain relevant as the High Court examines the firm’s challenge to the assessment, penalty and recovery proceedings.