Supreme Court of India
PR. COMMISSIONER OF INCOME TAX 6 versus NOKIA INDIA PVT. LTD. on 8 April 2019
SUPREME COURT REPORTS
[2019] 6 S.C.R.
A
PR. COMMISSIONER OF INCOME TAX 6
v.
NOKIA INDIA PVT. LTD.
(Civil Appeal No. 3450 of 2019)
B
APRIL 08, 2019
[ABHAY MANOHAR SAPRE ANDDINESH MAHESHWARI, JJ.]
Income Tax Act, 1961 – ss.260-A, 148 – Assessing officer(AO) issued notice to the respondent u/s.148 – Objections raisedCby the respondent were accepted by the ITAT – Aggrieved, Revenuefiled appeal in the High Court – High Court dismissed the appeal inlimine on the ground that it did not involve any substantial questionof law within the meaning of s.260A of the Act – On appeal, held:The order of the High Court legally not sustainable – The followingDfour questions need to be answered by the High Court on theirrespective merits while deciding the appeal filed by the Revenue u/s.260-A of the Act – (i)Whether the ITAT was justified in holdingthat the notice issued by the AO u/s.148 was bad in law whenadmittedly the impugned notice was issued in the case where theassessment was made u/s.143(1) of the Act but not u/s.143(3) of theEAct – (ii)Whether the ITAT was justified in holding that the noticeissued u/s.148 of the Act was bad because it was based on merechange of opinion by overlooking the fact that there was nofoundation to form any such opinion – (iii) When admittedly thenotice in question satisfied the requirements of s.148 of the Act as itFstood, namely, that first, it contained the facts constituting the“reasons to believe” and second, it furnished the necessary detailsfor assessing the escaped income of the assessee, whether the ITATwas still justified in declaring the notice as being bad in law withouttaking into consideration any of these admitted facts – (iv) In case,if the notice is held proper and legal, whether the finding recordedGby the ITAT on the merits of the case on each item, which is subjectmatter of the notice, is legally sustainable – Thus, case remanded tothe High Court for answering the aforementioned questions on meritsin accordance with law.
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CIVIL APPELLATE JURISDICTION: Civil Appeal No.3450 of2019
From the Judgment and Order dated 21.04.2017 of the HighCourt of Delhi at New Delhi in ITA No. 854 of 2016.
Ms. Rekha Pandey, Akshay Amritanshu (for Mrs. Anil Katiyar),Advs. for the Appellant.
Vikas Srivastava, Jatinder Pal Singh, Sumit Mangal, Vikrant A.Maheshwari (for Mayank Pandey), Advs. for the Respondent.
The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J.
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1. Leave granted.
2. This appeal is filed against the final judgment and order dated21.04.2017 passed by the High Court of Delhi at New Delhi in ITANo.854 of 2016 whereby the Division Bench of the High Court dismissedthe appeal filed by the appellant herein.
3. A few facts need mention hereinbelow for the disposal of thisappeal, which involves a short point.
4. By impugned order, the Division Bench of the High Courtdismissed the Revenue’s (appellant herein) appeal filed under Section260-A of the Income Tax Act, 1961 (hereinafter referred to as “theAct”) on the ground that it did not involve any substantial question oflaw within the meaning of Section 260-A of the Act.
5. In other words, the High Court was of the view that since theappeal did not involve any substantial question of law, it deserves dismissalin limine.
6. The appellant is the Revenue (Commissioner of Income Tax)and the respondent is an assessee. The issue arises out of an assessmentyear (1999-2000).
7. The issue essentially relates to legality and correctness of thenotice issued by the Assessing Officer (AO) to the respondent underSection 148 of the Act and to the consequential determination made bythe AO in the assessment order for which the impugned notice wasissued to the respondent.
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A8. The objections raised by the respondent (assessee) to the noticecontending inter alia that since the impugned notice was based on“change of the opinion” and hence bad in law was upheld by the ITATresulting in allowing the respondent’s appeal and further by dismissingthe Revenue’s appeal by the High Court. The Revenue has felt aggrievedby the order of the High Court dismissing their appeal in limine and hasBfiled the present appeal by way of special leave in this Court.
9. The short question, which arises for consideration in this appeal,is whether the High Court was right in dismissing the Revenue’s appealin limine holding that it did not involve any substantial question of law.
C10. Having heard the learned counsel for the parties and on perusalof the record of the case, we are of the view that the High Court wasnot justified in dismissing the appeal on the ground that the appeal did notinvolve any substantial question of law. We are, therefore, constrainedto allow this appeal, set aside the impugned order and remand the caseto the High Court for deciding the appellant’s appeal afresh on merits inDaccordance with law.
11. In our considered view, the following substantial questions oflaw do arise in this appeal filed by the Revenue (appellant herein) underSection 260-A of the Act in the High Court against the order dated03.06.2016 passed by the ITAT in Appeal No. 1870/DEL/2010 and theEsame should have been framed by the High Court for deciding the appealon merits in accordance with law:
1. Whether the ITAT was justified in holding that the noticeissued by the AO under Section 148 was bad in law whenadmittedly the impugned notice was issued in the case wherethe assessment was made under Section 143(1) of the Actbut not under Section 143(3) of the Act.
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2. Whether the ITAT was justified in holding that the noticeissued under Section 148 of the Act was bad because it wasbased on mere change of opinion by overlooking the factthat there was no foundation to form any such opinion.
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3 When admittedly the notice in question satisfied therequirements of Section 148 of the Act as it stood, namely,that first, it contained the facts constituting the “reasonsto believe” and second, it furnished the necessary details H
PR. COMMISSIONER OF INCOME TAX 6 v. NOKIA INDIAPVT. LTD. [ABHAY MANOHAR SAPRE, J.]
for assessing the escaped income of the assessee, whetherthe ITAT was still justified in declaring the notice as beingbad in law without taking into consideration any of theseadmitted facts.
4. In case, if the notice is held proper and legal, whetherthe finding recorded by the ITAT on the merits of the caseon each item, which is subject matter of the notice, is legallysustainable.
12. In our considered view, the aforementioned four questionsframed need to be answered by the High Court on their respective meritswhile deciding the appeal filed by the Revenue (appellant herein) underSection 260-A of the Act.
13. We are, therefore, of the view that such order is not legallysustainable in law and hence deserves to be set aside.
14. In view of the foregoing discussion, the appeal succeeds andis accordingly allowed. The impugned order is set aside. The case isremanded to the High Court for answering the aforementioned questionson merits in accordance with law.
15. Since we have formed an opinion to remand the case to theHigh Court for its fresh disposal on merits, we have not expressed anyopinion on the merits of the case while deciding this appeal. The HighCourt will, therefore, decide the appeal uninfluenced by any observationmade by this Court in this order.
Ankit Gyan
Appeal allowed.
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