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)
Nokia India Pvt. Ltd. ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
- Leave granted.
- 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
dismissed the appeal filed by the appellant herein.
- A few facts need mention hereinbelow for the
disposal of this appeal, which involves a short point.
- 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.
- 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.
- The appellant is the Revenue (Commissioner of
Income Tax) and the respondent is an assessee. The
issue arises out of an assessment year (19992000).
- The issue essentially relates to legality and
correctness of the notice issued by the Assessing
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.
- 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.
- The short question, which arises for
consideration in this appeal, is whether the High
Court was right in dismissing the Revenue’s appeal
in limine holding that it did not involve any
substantial question of law.
- 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
- 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
have been framed by the High Court for deciding the
appeal on merits in accordance with law:
- 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.
- 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
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
- 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.
- We are, therefore, of the view that such order
is not legally sustainable in law and hence deserves
to be set aside.
- 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.
- 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
uninfluenced by any observation made by this
Court in this order.
[ABHAY MANOHAR SAPRE] ……………………………………….J.
April 08, 2019