PR. COMMISSIONER OF INCOME TAX 6 vs. NOKIA INDIA PVT. LTD

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION 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)

J U D G M E N T 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 whereby   the   Division   Bench   of   the   High   Court 1 Digitally signed by ASHOK RAJ SINGH Date: 2019.04.08 17:01:19 IST Reason: Signature Not Verified

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

uninfluenced   by   any   observation   made   by   this Court in this order. .………...................................J. [ABHAY MANOHAR SAPRE]

…...……..................................J. [DINESH MAHESHWARI] New Delhi; April 08, 2019 7