PR. COMMISSIONER OF INCOME TAX 6versusNOKIA INDIA PVT. LTD.

478                      [2019]REPORTS
               SUPREME COURT    6 S.C.R. 478                [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 AND
                       DINESH MAHESHWARI, JJ.]
             Income Tax Act, 1961 – ss.260-A, 148 – Assessing officer
      (AO) issued notice to the respondent u/s.148 – Objections raised
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      by the respondent were accepted by the ITAT – Aggrieved, Revenue
      filed appeal in the High Court – High Court dismissed the appeal in
      limine on the ground that it did not involve any substantial question
      of law within the meaning of s.260A of the Act – On appeal, held:
      The order of the High Court legally not sustainable – The following
D     four questions need to be answered by the High Court on their
      respective merits while deciding the appeal filed by the Revenue u/
      s.260-A of the Act – (i)Whether the ITAT was justified in holding
      that the notice issued by the AO u/s.148 was bad in law when
      admittedly the impugned notice was issued in the case where the
      assessment was made u/s.143(1) of the Act but not u/s.143(3) of the
E
      Act – (ii)Whether the ITAT was justified in holding that the notice
      issued u/s.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 – (iii) When admittedly the
      notice in question satisfied the requirements of s.148 of the Act as it
F     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 – (iv) In case,
      if the notice is held proper and legal, whether the finding recorded
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      by the ITAT on the merits of the case on each item, which is subject
      matter of the notice, is legally sustainable – Thus, case remanded to
      the High Court for answering the aforementioned questions on merits
      in accordance with law.

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                                      478
  PR. COMMISSIONER OF INCOME TAX 6 v. NOKIA INDIA                               479
                    PVT. LTD.

       CIVIL APPELLATE JURISDICTION: Civil Appeal No.3450 of                    A
2019
      From the Judgment and Order dated 21.04.2017 of the High
Court of Delhi at New Delhi in ITA No. 854 of 2016.
      Ms. Rekha Pandey, Akshay Amritanshu (for Mrs. Anil Katiyar),
Advs. for the Appellant.                                                        B

     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.                                                  C
       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 dismissed
                                                                                D
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           E
260-A 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 260-A 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   F
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 (1999-2000).
      7. The issue essentially relates to legality and correctness of the       G
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.
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480             SUPREME COURT REPORTS                           [2019] 6 S.C.R.


A            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
B
      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
      in limine holding that it did not involve any substantial question of law.
C            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
D     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 260-A 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
E     same should 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
F           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
G           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
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  PR. COMMISSIONER OF INCOME TAX 6 v. NOKIA INDIA                            481
        PVT. LTD. [ABHAY MANOHAR SAPRE, J.]

      for assessing the escaped income of the assessee, whether              A
      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             B
      on each item, which is subject matter of the notice, is legally
      sustainable.
      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      C
Section 260-A 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         D
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       E
Court will, therefore, decide the appeal uninfluenced by any observation
made by this Court in this order.


Ankit Gyan                                                 Appeal allowed.
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