2019 INSC 0348
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
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dismissed   the   appeal   filed   by   the   appellant   herein.
3. A   f ew   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
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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
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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
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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. 
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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
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uninfluenced   by   any   observation   made   by   this
Court in this order.       
                                      .………...................................J.
                                    [ABHAY MANOHAR SAPRE]     
                                
     … ...……..................................J.
             [DINESH MAHESHWARI]
New Delhi;
April 08, 2019
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