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.

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
    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:
  12. 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.
  13. 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
  14. 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.
  15. We are, therefore, of the view that such order
    is not legally sustainable in law and hence deserves
    to be set aside.
  16. 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.
  17. 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