Pr. Commissioner Of Income Tax 6 vs Nokia India Pvt. Ltd.

CIVIL APPEAL No.3450 OF 2019 (Arising out of S.L.P.(C) No.32222 of 2017)

Pr. Commissioner of Income Tax 6 ….Appellant(s)

VERSUS

Nokia India Pvt. Ltd. ….Respondent(s)

JUDGMENT

Abhay Manohar Sapre, J.

1. Leave granted.

2. This appeal is filed against the final judgment

and order dated 21.04.2017 passed by the High

Court of Delhi at New Delhi in ITA No.854 of 2016 Signature Not Verified Digitally signed by ASHOK RAJ SINGH whereby the Division Bench of the High Court Date: 2019.04.08 17:01:19 IST Reason: 1 dismissed the appeal filed by the appellant herein.

3. A few facts need mention hereinbelow for the

disposal of this appeal, which involves a short point.

4. By impugned order, the Division Bench of the

High Court dismissed the Revenue's (appellant

herein) appeal filed under Section 260­A of the

Income Tax Act, 1961 (hereinafter referred to as “the

Act”) on the ground that it did not involve any

substantial question of law within the meaning of

Section 260­A of the Act.

5. In other words, the High Court was of the view

that since the appeal did not involve any substantial

question of law, it deserves dismissal in limine.

6. The appellant is the Revenue (Commissioner of

Income Tax) and the respondent is an assessee. The

issue arises out of an assessment year (1999­2000).

7. The issue essentially relates to legality and

correctness of the notice issued by the Assessing

2 Officer (AO) to the respondent under Section 148 of

the Act and to the consequential determination

made by the AO in the assessment order for which

the impugned notice was issued to the respondent.

8. The objections raised by the respondent

(assessee) to the notice contending inter alia that

since the impugned notice was based on "change of

the opinion" and hence bad in law was upheld by

the ITAT resulting in allowing the respondent's

appeal and further by dismissing the Revenue's

appeal by the High Court. The Revenue has felt

aggrieved by the order of the High Court dismissing

their appeal in limine and has filed 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 appeal

3 in limine holding that it did not involve any

substantial question of law.

10. Having heard the learned counsel for the

parties and on perusal of the record of the case, we

are of the view that the High Court was not justified

in dismissing the appeal on the ground that the

appeal did not involve any substantial question of

law. We are, therefore, constrained to allow this

appeal, set aside the impugned order and remand

the case to the High Court for deciding the

appellant’s appeal afresh on merits in accordance

with law.

11. In our considered view, the following

substantial questions of law do arise in this appeal

filed by the Revenue (appellant herein) under

Section 260­A of the Act in the High Court against

the order dated 03.06.2016 passed by the ITAT in

Appeal No. 1870/DEL/2010 and the same should

4 have been framed by the High Court for deciding the

appeal on merits in accordance with law:

1. Whether the ITAT was justified in holding that the notice issued by the AO under Section 148 was bad in law when admittedly the impugned notice was issued in the case where the assessment was made under Section 143(1) of the Act but not under Section 143(3) of the Act.

2. Whether the ITAT was justified in holding that the notice issued under Section 148 of the Act was bad because it was based on mere change of opinion by overlooking the fact that there was no foundation to form any such opinion.

3 When admittedly the notice in question satisfied the requirements of Section 148 of the Act as it stood, namely, that first, it contained the facts constituting the "reasons to believe" and second, it furnished the necessary details for assessing the escaped income of the assessee, whether the ITAT was still justified in declaring the notice as being bad in law without taking into consideration any of these admitted facts.

4 In case, if the notice is held proper and legal, whether the finding recorded by the ITAT on the merits of the case on each item, which is subject matter of the notice, is legally sustainable.

5 12. In our considered view, the aforementioned

four questions framed need to be answered by the

High Court on their respective merits while deciding

the appeal filed by the Revenue (appellant herein)

under Section 260­A of the Act.

13. We are, therefore, of the view that such order

is not legally sustainable in law and hence deserves

to be set aside.

14. In view of the foregoing discussion, the appeal

succeeds and is accordingly allowed. The impugned

order is set aside. The case is remanded to the High

Court for answering the aforementioned questions

on merits in accordance with law.

15. Since we have formed an opinion to remand

the case to the High Court for its fresh disposal on

merits, we have not expressed any opinion on the

merits of the case while deciding this appeal. The

High Court will, therefore, decide the appeal

6 uninfluenced by any observation made by this

Court in this order.

.………...................................J. [ABHAY MANOHAR SAPRE]

…...……..................................J. [DINESH MAHESHWARI]

New Delhi;

April 08, 2019

7