Karnataka High Court
M/S Ltimindtree Limited vs The Joint Commissioner on 21 August, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 14.08.2025
Pronounced on : 21.08.2025
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF AUGUST, 2025
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.52364 OF 2019 (T - IT)
C/W
WRIT PETITION No.52319 OF 2019 (T - IT)
IN WRIT PETITION No.52364 OF 2019
BETWEEN:
M/S.LTIMINDTREE LIMITED
(SUCCESSOR IN INTEREST OF
M/S. AZTECSOFT LTD.,)
GLOBAL VILLAGE, RVCE POST
MYSORE ROAD
BENGALURU - 560 059
(REPRESENTED BY MS.SONAL BASU
GENERAL COUNSEL AND ASSOCIATE VICE PRESIDENT
D/O SRI SHAM RAUT
AGED ABOUT 39 YEARS.
... PETITIONER
(BY SRI K.K.CHYTHANYA, SR.ADVOCATE A/W
SRI S.SHARATH, ADVOCATE AND
SRI TATA KRISHNA, ADVOCATE)
2
AND:
1. THE JOINT COMMISSIONER
OF INCOME TAX (OSD)
CENTRAL CIRCLE -1(3)
CENTRAL REVENUE BUILDING
QUEENS ROAD
BENGALURU - 560 001.
2. THE DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE -1(3)
CENTRAL REVENUE BUILDING
QUEENS ROAD
BENGALURU - 560 001.
3. THE ASSISTANT COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE - 1(3),
CENTRAL REVENUE BUILDING,
QUEENS ROAD,
BENGALURU - 560 001.
... RESPONDENTS
(BY SRI RAVI RAJ Y.V., ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO
(A) QUASH THE IMPUGNED NOTICE BEARING NO.F.NO.CDG-
CM8839/09-10/CEN.CIR-1(3).BLR/2018-19 ISSUED BY THE R-1
U/S 148 R/W SECTION 150 OF THE IT ACT, DATED 29.03.2019
ENCLOSED AS ANNEXURE-A; (B) QUASH THE IMPUGNED LETTER
BEARING NO.ITBA/COM/F/17/2019-20/1019232950(1) ISSUED BY
THE R-2 FURNISHING THE REASONS RECORDED FOR INITIATION
OF REASSESSMENT PROCEEDINGS, DATED 22.10.2019 ENCLOSED
AS ANNEXURE-B; (C) QUASH THE IMPUGNED ORDER OVERRULING
OBJECTION BEARING NO.ITBA/COM/F/17/2019-20/1021625043
(1), DATED 04.12.2019, PASSED BY THE R-2 ENCLOSED AS
ANNEXURE - C; (D) QUASH THE IMPUGNED NOTICE BEARING
3
NO.F.NO.CDG-CM8839/09-10/CEN.CIR-1(3).BLR./2019-20 ISSUED
BY THE R-2 UNDER SECTION 143(2), DATED 23.10.2019,
ENCLOSED AS ANNEXURE-D AND (E) GRANT SUCH OTHER RELIEFS
AS THIS HON'BLE HIGH COURT MAY THINK FIT INCLUDING THE
COSTS OF THIS WRIT PETITION.
IN WRIT PETITION No.52319 OF 2019
BETWEEN:
M/S. LTIMINDTREE LIMITED
(SUCCESSOR IN INTEREST OF M/S. AZTECSOFT LTD.)
GLOBAL VILLAGE, RVCE POST
MYSURU ROAD
BENGALURU - 560 059
(REPRESENTED BY MS. SONAL BASU
GENERAL COUNSEL AND ASSOCIATE VICE PRESIDENT
D/O SRI SHAM RAUT
AGED ABOUT 39 YEARS.
... PETITIONER
(BY SRI K.K.CHYTHANYA, SR.ADVOCATE A/W
SRI S.SHARATH, ADVOCATE AND
SRI TATA KRISHNA, ADVOCATE)
AND:
1. THE JOINT COMMISSIONER OF INCOME TAX (OSD)
CENTRAL CIRCLE-1(3)
CENTRAL REVENUE BUILDING
QUEENS ROAD
BENGALURU - 560 001.
2. THE DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE -1(3)
CENTRAL REVENUE BUIDLING
4
QUEENS ROAD
BENGALURU - 560 001.
... RESPONDENTS
(BY SRI RAVI RAJ Y.V., ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO (A) QUASH THE
IMPUGNED NOTICE BEARING NO.F.NO.CDG-CM8839/08-
09/CEN.CIR-1(3).BLR/2018-19 ISSUED BY THE R-1 U/S 148 R/W
SECTION 150 OF THE IT ACT, DATED 29.03.2019 ENCLOSED AS
ANNEXURE-A; (B) QUASH THE IMPUGNED LETTER BEARING NO.
ITBA/COM/F/17/2019-20/1019230755(1) ISSUED BY THE R-2
FURNISHING THE REASONS RECORDED FOR INITIATION OF
REASSESSMENT PROCEEDINGS, DATED 22.10.2019 ENCLOSED AS
ANNEXURE-B; (C) QUASH THE IMPUGNED ORDER OVERRULING
OBJECTION BEARING NO.ITBA/COM/F/17/2019-20/1021621267(1),
DATED 04.12.2019, PASSED BY R-2 ENCLOSED AS ANNEXURE-C;
(D) QUASH THE IMPUGNED NOTICE BEARING NO.F.NO.CDG-
CM8839/08-09/CEN.CIR-1(3).BLR./2019-20 ISSUED BY THE R-2
UNDER SECTION 143(2), DATED 23.10.2019. ENCLOSED AS
ANNEXURE D; (E) GRANT SUCH OTHER RELIEFS AS THIS HON'BLE
HIGH COURT MAY THINK FIT INCLUDING THE COSTS OF THIS
WRIT PETITION.
THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 14.08.2025, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
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CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
These petitions twins in their grievance and identical in
their legal challenge, are conjoined for adjudication, for the
issues they raise and notices they assail are cast from the
same mould. What emerges before this Court is not merely
contest over set of statutory provisions of the Income Tax
Act, 1961 (hereinafter referred to as 'the Act' for short), but
over the very reach of jurisdiction. Since facts are common,
facts as obtaining in Writ Petition No.52319 of 2019 would be
narrated.
2. The petitioner, a Public Limited Company is before this
Court calling in question the notice dated 29-03-2019 issued by the
1st respondent/Joint Commissioner of Income tax (OSD) under
Section 148 r/w Section 150 of the Act, inter alia.
3. Shorn of unnecessary details, facts germane, are as
follows: -
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3.1. The petitioner is said to be engaged in the business of
development and export of software. The Transfer Pricing Officer
passed an order under Section 92CA of the Act in the name of one
M/s Aztecsoft Limited, a Company that existed prior to the merger
with the present petitioner M/s Mindtree Limited, which is now
further merged with Larsen & Toubro Infotech Limited with effect
from 15-11-2022 and is now rechristened as 'LTIMindtree Limited'.
The Assessing Officer then passes an order under Section 143(3)
with respect to Section 144C of the Act again in the name of
merged Company M/s Aztecsoft Limited. The petitioner calls this in
question before the Income Tax Appellate Tribunal ('the Tribunal'
for short) seeking quashment of final assessment order passed
under Section 143(3) r/w Section 144C of the Act.
3.2. The Tribunal quashes the order reserving liberty to the
revenue to take action in accordance with law. Pursuant to the said
order, a notice is issued under Section 148 r/w 150 of the Act
proposing to reopen assessment of the petitioner for the
assessment year 2008-2009. The petitioner objects to the same
before the 1st respondent to consider the original return filed under
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Section 139, as the return was in response to a notice issued under
Section 148 r/w Section 150 of the Act for the assessment year
2008-2009. In return comes a second notice intimating the
petitioner to file fresh return in the name of the present Company.
3.3. The petitioner again appears before the 2nd respondent,
files objections, as the e-filing portal cannot be accessed due to
impossibility of filing a return on the e-filing portal, as the notice
was for the assessment year 2008-2009 and by the time the notice
was issued, 10 years had elapsed. The petitioner, files
objections/reply to the notice issued under Section 148 r/w Section
150 of the Act. A communication then comes about furnishing
reasons recorded for reopening the assessment on 22-10-2019,
thereby declining to accept the objections or reply to the notice so
issued as aforesaid. A notice then comes about on 23-10-2019
under Section 143(2) to which the petitioner also files objections,
which comes to be overruled on 04-12-2019. Therefore, the
petitioner is before this Court calling in question the notices so
issued on 29-03-2019 reopening the assessment for the year 2008-
2009, as being contrary to law and lacking in jurisdiction.
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4. Heard Sri K.K. Chythanya, learned senior counsel
appearing for the petitioner and Sri Ravi Raj Y.V., learned counsel
appearing for the respondents.
5. The learned senior counsel Sri K.K. Chythanya appearing
for the petitioner would vehemently contend that the bar under
Section 149 of the Act operates, as the maximum period which is
available for reopening of an assessment is 4 years, which is
extendable by 2 years on certain circumstances. In the case at
hand, the notices are issued on 29-03-2019 for reopening an
assessment for the assessment year 2008-2009, which is
undoubtedly 10 years old. He would submit that the revenue has
taken shelter under Section 150 of the Act which deals with a
provision for cases where assessment is in pursuance of an order in
appeal. He would submit that the order in appeal was in favour of
the assessee. It never permitted the revenue to act contrary to law.
The liberty that was reserved was only to act in consonance with
law. He would contend that this touches upon the jurisdiction of the
1st respondent to have issued a notice, 10 years after the
assessment, for reopening the said assessment.
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5.1. The learned senior counsel would contend that twin
objectives of Section 150 is not fulfilled in the case at hand. He
would thus contend that if jurisdictional issue is accepted, no other
contention need be urged or considered, as the notice would be
barred by law. He would for the present restrict his submissions to
the jurisdictional issue and seeks liberty in the event this Court
would hold that the revenue had jurisdiction to issue the notice, to
submit on other grounds that are urged in the petitions. On the
jurisdictional issue itself, the learned senior counsel would seek
quashment of notices and all further proceedings taken thereto.
6. On the converse, the learned counsel appearing for the
revenue Sri Y.V. Ravi Raj would refute the submissions of the
learned senior counsel, again taking shelter under Section 150 of
the Act. He would submit that the order in appeal reserved
opportunity to the revenue to initiate proceedings or reopen
assessment. The notices earlier were issued to the Company way
back in the year 2009 itself. But, after merger, it was nonetheless
issued in the name of M/s Aztecsoft Limited, indicating that it was
under the LTIMindtree Limited. Therefore, the proceedings are
10
annulled and liberty is given by the Tribunal. The liberty would date
back and, therefore, Section 150 permits reopening of the
assessment pursuant to an order of the Tribunal. It is his further
submission that what is called in question are notices, the
petitioners undoubtedly have alternative remedy within the
department or hierarchy in the department to call the said notices
in question, the writ petitions would not be maintainable. On all
the aforesaid contentions, the learned counsel for the revenue
seeks dismissal of the petition.
7. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
In furtherance whereof, the following issues would arise for
consideration:
(i) Whether the impugned notices dated 29-03-2019
and the proceedings taken in the aftermath, suffer
from want of jurisdiction?
(ii) Whether the writ petitions calling in question the
notices issued would be maintainable and
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entertainable before this Court, in exercise of its
jurisdiction under Article 226 of the Constitution
of India, in the teeth of availability of an
alternative remedy?
Issue No.1:
(i) Whether the impugned notices dated 29-03-2019
and the proceedings taken in the aftermath, suffer
from want of jurisdiction?
FACTUAL PRELUDE TOWARDS CONSIDERATION OF THE
ISSUE:
8. The afore-narrated facts are not in dispute. They are all a
matter of record. The erstwhile Company M/s Aztecsoft Limited gets
merged into M/s Mindtree Limited in the year 2009. During the
assessment year 2008-2009 an order is passed by the Transfer
Pricing Officer under Section 92CA of the Act in the name of M/s
Aztecsoft Limited, the erstwhile Company of the petitioner. This
triggers proceedings at the hands of the Assessing Officer under
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Section 143(3) r/w Section 144C of the Act again in the name of
M/s Aztecsoft Limited. Since they were proceedings under Section
143(3) and 144C, the remedy available to an assessee is to knock
at the doors of the Tribunal without passing through the appellate
forum within the Department. The petitioner files the appeal before
the Tribunal in IT(TP)A No.1555/Bang/2012. The Income Tax
Appellate Tribunal by its order dated 08-12-2017 sets aside the
action of the Transfer Pricing Officer to have passed an order under
Section 92CA of the Act. The entire fulcrum of the lis revolves round
the order that is passed by the Tribunal. Therefore, I deem it
appropriate to notice those paragraphs which are germane for
consideration of the issue in the lis. They read as follows:
".... .... ....
3. It was submitted by ld. AR of assessee that on pages
96 to 126 of paper book is copy of scheme of amalgamation of
Aztecsoft Ltd. with Mindtree Ltd. and on pages 127 to 137 of
paper book is the copy of order dated 03.06.2009 of Hon'ble
Karnataka High Court in Company Petition No. 09 of 2009
sanctioning the scheme of amalgamation. He also submitted
that copy of Form 21 filed by Mindtree Ltd. to Registrar of
Company intimating the sanction of scheme of amalgamation on
17.06.2009 is available on pages 138 to 142 of the paper book.
He also submitted that similarly, copy of Form 21 filed by
Aztecsoft Ltd. to Registrar of Company intimating the sanction
of scheme of amalgamation on 17.06.2009 is available on pages
143 to 147 of paper book. Thereafter, he submitted that on
page no. 148 of paper book is copy of letter along with the court
13
order intimating the sanction of scheme of amalgamation filed
before AO i.e. DCIT, Circle 11 (1) dated 23.07.2009 filed on
24.07.2009. Thereafter, he submitted that the impugned
assessment order was passed by the AO on 16.10.2012
i.e. much after the merger date and the date of intimation
of merger and the said assessment order is passed in the
name of the merged entity Aztecsoft Ltd. although it is
stated in the assessment order that this company is now
merged with Mindtree Ltd. and therefore, this is apparent
that the fact of merger is very much in the knowledge of
AO. He submitted that under these facts, the assessment order
is bad in law and it should be quashed and in support of his
contention, he placed reliance on the judgment of Hon'ble Delhi
High Court rendered in the case of Principal CIT Vs. Maruti
Suzuki India Ltd. which is successor of M/s. Suzuki Powertrain
India Ltd. as reported in 397 ITR 681 (Delhi). He also submitted
copy of a judgment of Hon'ble Apex Court rendered in the case
of CIT Vs. M/s. Spice Enfotainment Ltd. in Civil Appeal No. 285
of 2014 dated 02.11.2017 and placed reliance on it. He
submitted that the SLP filed by the revenue was dismissed. He
also submitted copy of a judgment of Hon'ble Karnataka High
Court rendered in the case of CIT Vs. M/s. Intel Technology
India Pvt. Ltd. successor in interest to M/s. Software & Silicon
Systems India Pvt. Ltd. in ITA Nos. 499 & 500/2009 dated
03.03.2015 and placed reliance on it. He submitted that in this
case also, it was held by Hon'ble Karnataka High Court that the
assessment order passed in the merged entity name is not valid
in law and same was quashed although it was held that
department may proceed for making assessment in accordance
with law in the name of new entity in terms of the provisions of
the IT Act, 1961.
4. The ld. DR of revenue filed written submissions which
are reproduced here below.
"In this case, the assessee is challenging the validity
of assessment order passed on 16.10.2012 in the name of
M/s Aztecsoft Limited (now merged with M/s Mindtree
Limited) by filing additional grounds of appeal.
2. It is noted that the assessee has not challenged
the jurisdiction issue in any of the earlier proceedings,
14
neither during the assessment proceedings nor during the
DRP proceedings.
3. It may kindly be noted that the name of the
assessee in the first page of the assessment order for 2008-
09 is mentioned as M/s Aztecsoft Ltd (now merged with
M/s Mind Tree Ltd). The address of the assessee
mentioned in the assessment order is "Global Village,
Rvce post, Mysore road, Bangalore-560059". This is the
correct address of successor entity M/s Mind Tree Ltd and
not of erstwhile entity M/s Aztechsoft Ltd. It means that the
event of merger of assessee company has been duly taken
into account while passing the assessment order. Further,
the first paragraph of the final assessment order is quoted
below.
"Aztechsoft Limited (Aztech for short), incorporated in
1995, now merged with Mindtree Limited is the principal
holding company of AztechDishaInc and Aztech US."
It can be seen from the above that the assessment
order is indeed passed in the name of successor company
wherein the Name, address have been correctly mentioned.
4. It is observed that the assessee company filed its
return of income on 29.09.2008 in the name M/s Aztech
Soft Ltd. for A.Y. 2008-09 with total income of Rs.
7,39,72,420 and a refund claim of Rs. 1,52,59,030. The
assessee company got merged with Mindtree Limited with
appointed date of 01/04/2009 as approved by the Hon'ble
High Court vide order dated 09/06/2009. Thus, till
31.03.2009, Aztech Soft Ltd had separate existence and the
assessment year in question is with regard to the financial
affairs of the assessee company for F.Y. 2007-08. Notice u/s
143(2) of the Act was issued to the assessee company on
27/08/2009 selecting the case for scrutiny of the return
filed in the name of M/s Aztech Soft Ltd. The same was duly
served on the assessee. In fact, there was a response by
the assessee by way of acknowledging the receipt of notice
and seeking extension of time for appearance by way of
filing a letter dated 22/09/2009. The letter was signed by
Sri SrirangaKrish, Associate Director-Finance of Mindtree
Limited. However, there was no communication by the
assessee regarding the event of merger in the letter
(Enclosure-1).
5. It is noted that the refund claim of the assessee
was processed u/s 143(1) of the Act on 09/01/2010, which
15
is subsequent to the date of merger, in the name of Aztech
Soft Limited. However, the assessee has not objected for
the same while accepting the refund (copy of 143(1)
order-Enclosure-2).
6. Subsequent notices u/s 142(1) have been issued
in the name of M/s Aztech Soft Limited (now merged with
Mindtree Limited) and addressed to registered address of
Mindtree Limited (successor entity). Copy of notice u/s
142(1) dated 14.12.2011 is enclosed as one such reference
(enclosure-3). It is also seen that all the subsequent
notices and orders such as draft assessment order, DRP
order, Final assessment order have been passed in the
name of M/s Aztech Soft Limited (now merged with
Mindtree Limited) and addressed to registered address of
Mindtree Limited (successor entity). The assessee has also
filed responses in the same manner. One such reply of
assessee dated 16/01/2012 is enclosed (Enclosure-4) for
ready reference. Even the power of attorney filed by the
assessee before the assessing officer mentions the details
as M/s Aztech Soft Limited (now merged with Mindtree
Limited) (enclosure-5). Therefore, the assessee is not
correct in stating that the assessment order passed is not
valid.
7. It is also verified from records that the change in
address of the assessee was informed officially only on
26/11/2012 to the DCIT, Circle 12(1), which was forwarded
to the DCIT (LTU) (enclosure-6).
8. In view of all the facts above, the assessee cannot
take a stand that the assessment order was passed on
nonexistent entity. The provisions of section 170(1) of the
Act are clearly applicable in this case, as the succession of
business has taken place by way of merger and the
assessment in respect of business carried on by the
assessee till the date of merger is assessed in the hands of
the assessee and addressed to the successor company. It is
also pointed out that the assessment has been made after
recording the fact of merger and Mindtree Ltd being the
successor, all the liabilities stand transferred to it post
merger.
9. The Hon'ble ITAT, Bangalore in the case of
TrishulBuildtech Infrastructure (P) Ltd vs JCIT, ITA No.s
1362 & 1367/Bang/2013 dated 20.02.2015 decided the
16
issue in favour of revenue in similar circumstances. The
relevant para is extracted as under.
"25 It can be seen from the provisions of
s.170(1) that if there is a succession in the business of
assessee, the predecessor has to be assessed in
respect of income of the previous year in which
succession took place upto the date of succession. The
admitted factual position in the present case is that the
conversion of Trishul Developers the partnership firm
as limited company by name TBIPL took place on
1.2.2010. Therefore, for A.Ys 2004-05, 2005-06 &
2007-08, only Trishul Developers will have to be
assessed. The provisions of s.170(2) cannot be
involved for the simple reason that the erstwhile firm
filed the return of income and was very much
available. S. 170(2) is attracted only in a case where
the predecessor "cannot be found". In our opinion, the
CIT(A) has rightly rejected the contentions in this
regard put forth by the assessee."
10. It is submitted that the decisions of Hon'ble High
Court in the case of Intel technology [2015] 57
taxmann.com 159 and Hon'ble ITAT decision in the case of
M/s. GE Medical Systems (India) Pvt. Ltd., (Since merged
with Wipro GE Healthcare Pvt. Ltd.) I.T. (T.P.) Α.
No.328/Bang/2015 are not applicable to the facts of the
present case.
Because, in those cases, the assessment orders were
passed in the name of nonexistent companies without
considering the event of merger and even when there was
intimation of such merger to the assessing officer. However,
in the present case, as mentioned in earlier paragraphs, the
assessment order was passed in the name of M/s Aztech
Soft Limited (now merged with Mindtree Limited) duly
considering the event of merger and clearly bringing the
fact of merger in the assessment order.
11. In view of the facts and legal position brought
out in above paragraphs, it is humbly requested to dismiss
the assessee's additional grounds of appeal challenging the
validity of the assessment order."
5. We have considered the rival submissions. We find that
in the written submissions filed by the ld. DR of revenue as
reproduced above, this is the main contention that since in the
assessment order, along with the name of the merged company,
17
the name of the successor company is also mentioned, it cannot
be said that the assessment is completed in the name of the
merged company. Regarding this submission of the ld. DR of
revenue, we find that in the case of Principal CIT Vs. Maruti
Suzuki India Ltd. (supra) also, the assessment order was passed
in the name of M/s. Suzuki Powertrain India Ltd. (amalgamated
with Maruti Suzuki India Ltd.) as noted by Hon'ble Delhi High
court in the cited judgment. Hence, it is seen that in that case
also, facts are same and still the issue was decided in favour of
the assessee by Hon'ble Delhi High Court in that case by
following another judgment of Hon'ble Delhi High court rendered
in the case of Spice Infotainment Ltd. Vs. CIT as reported in 247
CTR 500 (Delhi). This judgement of Hon'ble Delhi High Court
rendered in the case of Spice Infotainment Ltd. Vs. CIT (supra)
has already been confirmed by the Hon'ble Apex Court. Hence in
the present case also, we hold by respectfully following these
judgments of Hon'ble Delhi High Court that the assessment
order framed in the present case in the name of
amalgamating company is bad in law and the same is
quashed although we make it clear that the department
may proceed for making assessment in the name of
merged company i.e. Mindtree Ltd. in accordance with
law in terms of provisions of the IT Act, 1961, as was
held by Hon'ble Karnataka High Court in case of CIT Vs.
M/s. Intel Technology India Pvt. Ltd. (supra).
6. In view of our decision in respect of additional
grounds of the assessee, the main grounds raised in the
appeal memo are not required to be adjudicated upon
because when the assessment order itself is quashed, no
further issue remains to be decided.
7. In the result, the appeal filed by the assessee is
allowed.
Order pronounced in the open court on the date
mentioned on the caption page.
Sd/- Sd/-
(LALIT KUMAR) (ARUN KUMAR GARODIA)
Judicial Member Accountant Member"
(Emphasis added)
18
The Tribunal, on the score that the assessment order framed in the
case before it was in the name of the amalgamating Company and,
therefore, bad in law, quashed the same. While so doing, the
Tribunal observes "....although we make it clear that the
department may proceed for making assessment in the
name of merged company i.e., Mindtree Limited in accordance
with law in terms of provisions of the IT Act, 1961" in terms of law
declared by this Court. Taking cue from the afore-quoted
observation of the Tribunal, springs the impugned notice on
29-03-2019. The notice reads as follows:
"NOTICE UNDER SECTION 148 r.w.s. 150 OF THE
INCOME-TAX ACT, 1961
Το,
The Principal Officer,
M/s. Mindtree Limited.,
(Previously known as M/s. Aztecsoft Ltd.,
now merged with M/S. Mindtree Ltd.)
Global Village, RVCE Post,
Mysore Road,
Bengaluru-560059.
I, propose to assess or re-assess or re-compute the
income/loss in your case for A.Y.2008-09 in consequence
to findings mentioned in order passed by Appellate
Authority; the ITAT's Order dated 08.12.2017; in
proceedings under this Act by way of appeal. And I
hereby require you to deliver to me within 30 days from
the service of this notice, a return in the prescribed form
for the said Assessment Year.
19
Sd/-
(PRIYADARSHINI L.B., IRS)
Joint Commissioner of Income-tax(OSD)
Central Circle-1(3), Bengaluru."
(Emphasis added)
The notice is issued under Section 148 r/w 150 of the Act. An order
is passed on 22-10-2019 recording the reasons for reopening the
assessment under Section 147 for the assessment year 2008-2009.
The reasons are as follows:
"Sir/Madam/ M/s,
Subject: Furnishing of copy of reasons recorded for
reopening of assessment u/s.147 of the
I.T. Act, 1961 in the case of M/s.
Mindtree Limited; PAN: AABCM8839K
(Previously: M/s. Aztecsoft Limited; PAN:
AABCA2122R) for the A.Y.2008-09 - Reg.
Reference: Your letter dated 03.10.2019.
With reference to the above-mentioned subject, as
requested by you vide letter mentioned in the above reference,
the reasons recorded for reopening of assessment u/s.147 of
the I.T. Act, 1961 in the case of M/s. Mindtree Limited; PAN:
AABCM8839K (Previously: M/s Aztecsoft Limited; PAN:
AABCA2122R) for the A.Y.2008-09 is provided herewith as
reproduced under:
"Basis of forming reason to believe and details of
escapement of income:
The assessed income in the case of the assessee for the
A.Y.2008-09 was determined at Rs.49,54,23,115/- as per order
u/s.143(3) r.w.s.144C dated 16.10.2012. The name of the
20
assessee as per the order is "M/s. Aztec Soft Ltd. (Now
merged with M/s. Mindtree Ltd.)". The assessee had filed
application for merger of M/s. Aztecsoft Ltd. with M/s. Mindtree
Ltd. with effect from 01.04.2009 which was approved by the
Hon'ble High Court vide order dated 09.06.2009. The
assessment order framed in the assessee's case was quashed by
the ITAT vide order dated 08.12.2017 holding that the order
framed in the name of amalgamating company (M/s. Aztecsoft
Ltd.) is bad in law. In the order, the ITAT has made it clear for
the department to proceed for making assessment in the name
of the merged company i.e. Mindtree Ltd. in accordance with
law in terms of provisions of the I.T. Act, 1961. The ITAT has
quashed the order on the issue of framing of the orders in
the name of amalgamating company and has not
adjudicated on income of Rs. 49,54,23,115/- which was
brought to tax in the order. Hence I have reason to
believe that income to the extent of Rs. 49,54,23,115/-
chargeable to tax which has not been adjudicated by the
ITAT has escaped assessment as the order through which
the income was brought to tax was quashed by the ITAT
vide order dated 08.12.2017."
SUNIL GOUTAM TADIMALLI
CENTRAL CIRCLE 1(3), BLR"
(Emphasis added)
Another notice was issued under Section 143(2) of the Act
directing the petitioner to attend the proceedings reopened in
terms of the notice so issued, on 23-10-2019. Objections were
filed by the assessee to the notice so issued and those objections
came to be repudiated by the rebuttal order dated 04-12-2019.
It is these orders that are called in question in the subject
petition.
21
9. Since the notice is issued under Section 148 r/w 150 of
the Act, I deem it appropriate to notice certain provisions of the
Act. The provisions that are to be referred now are in terms of
the Finance Act, 2018 which was the one that was in subsistence
at the time when the proceedings were instituted against the
petitioner. The Finance Act, 2021 brings about a paradigm shift
in the procedure on certain provisions. Since these proceedings
were initiated during the Finance Act, 2018, what was then
germane is required to be noticed.
RELEVANT STATUTORY FRAMEWORK:
10. Sections 147, 148, 149 and 150 of the Act read as
follows:
"Section 147. Income escaping assessment.-- If the
Assessing Officer, has reason to believe that any income
chargeable to tax has escaped assessment for any
assessment year, he may, subject to the provisions of
Sections 148 to 153, assess or reassess such income and
also any other income chargeable to tax which has
escaped assessment and which comes to his notice
subsequently in the course of the proceedings under this
section, or recompute the loss or the depreciation
allowance or any other allowance, as the case may be, for
the assessment year concerned (hereafter in this section
and in Sections 148 to 153 referred to as the relevant
assessment year):
22
Provided that where an assessment under sub-section
(3) of Section 143 or this section has been made for the
relevant assessment year, no action shall be taken under this
section after the expiry of four years from the end of the
relevant assessment year, unless any income chargeable to tax
has escaped assessment for such assessment year by reason of
the failure on the part of the assessee to make a return under
Section 139 or in response to a notice issued under sub-section
(1) of Section 142 or Section 148 or to disclose fully and truly
all material facts necessary for his assessment, for that
assessment year:
Provided further that nothing contained in the first
proviso shall apply in a case where any income in relation to any
asset (including financial interest in any entity) located outside
India, chargeable to tax, has escaped assessment for any
assessment year:
Provided also that the Assessing Officer may assess or
reassess such income, other than the income involving matters
which are the subject matters of any appeal, reference or
revision, which is chargeable to tax and has escaped
assessment.
Explanation 1.--Production before the Assessing Officer of
account books or other evidence from which material evidence
could with due diligence have been discovered by the Assessing
Officer will not necessarily amount to disclosure within the
meaning of the foregoing proviso.
Explanation 2.--For the purposes of this section, the
following shall also be deemed to be cases where income
chargeable to tax has escaped assessment, namely:--
(a) where no return of income has been furnished by the
assessee although his total income or the total income of any
other person in respect of which he is assessable under this Act
during the previous year exceeded the maximum amount which
is not chargeable to income tax;
(b) where a return of income has been furnished by the
assessee but no assessment has been made and it is noticed by
the Assessing Officer that the assessee has understated the
income or has claimed excessive loss, deduction, allowance or
relief in the return;
23
(b-a) where the assessee has failed to furnish a report in
respect of any international transaction which he was so
required under Section 92-E;
(c) where an assessment has been made, but--
(i) income chargeable to tax has been underassessed;
or
(ii) such income has been assessed at too low a rate;
or
(iii) such income has been made the subject of
excessive relief under this Act; or
(iv) excessive loss or depreciation allowance or any
other allowance under this Act has been computed.
(ca) where a return of income has not been furnished by
the assessee or a return of income has been furnished by him
and on the basis of information or document received from the
prescribed income-tax authority, under sub-section (2) of
Section 133-C, it is noticed by the Assessing Officer that the
income of the assessee exceeds the maximum amount not
chargeable to tax, or as the case may be, the assessee has
understated the income or has claimed excessive loss,
deduction, allowance or relief in the return;
(d) where a person is found to have any asset (including
financial interest in any entity) located outside India.
Explanation 3.--For the purpose of assessment or
reassessment under this section, the Assessing Officer may
assess or reassess the income in respect of any issue, which has
escaped assessment, and such issue comes to his notice
subsequently in the course of the proceedings under this
section, notwithstanding that the reasons for such issue have
not been included in the reasons recorded under sub-section (2)
of Section 148.
Explanation 4.--For the removal of doubts, it is hereby
clarified that the provisions of this section, as amended, by the
Finance Act, 2012, shall also be applicable for any assessment
year beginning on or before the 1st day of April, 2012.
148. Issue of notice where income has escaped
assessment.
24
(1) Before making the assessment, reassessment
or recomputation under section 147, the Assessing
Officer shall serve on the assessee a notice requiring him
to furnish within such period, as may be specified in the
notice, a return of his income or the income of any other
person in respect of which he is assessable under this Act
during the previous year corresponding to the relevant
assessment year, in the prescribed form and verified in
the prescribed manner and setting forth such other
particulars as may be prescribed; and the provisions of
this Act shall, so far as may be, apply accordingly as if
such return were a return required to be furnished under
section 139 :
Provided that in a case--
(a) where a return has been furnished during the period
commencing on the 1st day of October, 1991 and ending on the
30th day of September, 2005 in response to a notice served
under this section, and
(b) subsequently a notice has been served under sub-
section (2) of section 143after the expiry of twelve months
specified in the proviso to sub-section (2) of section 143, as it
stood immediately before the amendment of said sub-section by
the Finance Act, 2002 (20 of 2002) but before the expiry of the
time limit for making the assessment, re-assessment or
recomputation as specified in sub-section (2) of section 153,
every such notice referred to in this clause shall be deemed to
be a valid notice:
Provided further that in a case--
(a) where a return has been furnished during the period
commencing on the 1st day of October, 1991 and ending on the
30th day of September, 2005, in response to a notice served
under this section, and
(b) subsequently a notice has been served under clause
(ii) of sub-section (2) of section 143 after the expiry of twelve
months specified in the proviso to clause (ii) of sub-section (2)
of section 143, but before the expiry of the time limit for making
the assessment, reassessment or recomputation as specified in
25
sub-section (2) of section 153, every such notice referred to in
this clause shall be deemed to be a valid notice.
Explanation.--For the removal of doubts, it is hereby
declared that nothing contained in the first proviso or the
second proviso shall apply to any return which has been
furnished on or after the 1st day of October, 2005 in response
to a notice served under this section.
(2) The Assessing Officer shall, before issuing any notice
under this section, record his reasons for doing so.
Section 149. Time limit for notice.
(1) No notice under section 148 shall be issued for
the relevant assessment year,--
(a) if four years have elapsed from the end of the
relevant assessment year, unless the case falls
under clause (b) or clause (c);
(b) if four years, but not more than six years, have
elapsed from the end of the relevant
assessment year unless the income chargeable
to tax which has escaped assessment amounts
to or is likely to amount to one lakh rupees or
more for that year;
(c) if four years, but not more than sixteen years, have
elapsed from the end of the relevant assessment
year unless the income in relation to any asset
(including financial interest in any entity) located
outside India, chargeable to tax, has escaped
assessment.
Explanation.--In determining income chargeable to tax
which has escaped assessment for the purposes of this sub-
section, the provisions of Explanation 2 of section 147shall apply
as they apply for the purposes of that section.
(2) The provisions of sub-section (1) as to the issue of
notice shall be subject to the provisions of section 151.
26
(3) If the person on whom a notice under section 148 is
to be served is a person treated as the agent of a non-resident
under section 163 and the assessment, reassessment or
recomputation to be made in pursuance of the notice is to be
made on him as the agent of such non-resident, the notice shall
not be issued after the expiry of a period of six years from the
end of the relevant assessment year.
Explanation.--For the removal of doubts, it is hereby
clarified that the provisions of sub-sections (1) and (3), as
amended by the Finance Act, 2012, shall also be applicable for
any assessment year beginning on or before the 1st day of
April, 2012.
150. Provision for cases where assessment is in
pursuance of an order on appeal, etc.--(1)
Notwithstanding anything contained in Section 149, the
notice under Section 148 may be issued at any time for
the purpose of making an assessment or reassessment or
recomputation in consequence of or to give effect to any
finding or direction contained in an order passed by any
authority in any proceeding under this Act by way of
appeal, reference or revision or by a Court in any
proceeding under any other law.
(2) The provisions of sub-section (1) shall not apply in
any case where any such assessment, reassessment or
recomputation as is referred to in that sub-section relates to an
assessment year in respect of which an assessment,
reassessment or recomputation could not have been made at
the time the order which was the subject-matter of the appeal,
reference or revision, as the case may be, was made by reason
of any other provision limiting the time within which any action
for assessment, reassessment or recomputation may be taken."
(Emphasis supplied)
Section 147 permits reopening of an assessment, if the Assessing
Officer has reason to believe that any income chargeable to tax has
27
escaped assessment for any assessment year. He may subject to
provisions of Sections 148 to 153 reopen such assessments.
Section 148 mandates that before making the assessment,
reassessment or recomputation under Section 147, the Assessing
Officer should serve a notice on the assessee and follow the
procedure thereafter. Section 149 deals with time limit for such
notice. Section 149 mandates that no notice under Section 148
shall be issued for the relevant assessment year, if 4 years have
elapsed from the end of relevant assessment years, unless the case
falls under clause (b) or clause (c) of Section 149(1). Clause (b)
permits, no notice shall be issued if, 4 years but not more than 6
years have elapsed from the end of relevant assessment year,
unless the income chargeable to tax that has escaped assessment
amounts to or likely to amount to ₹1/- lakh or more in a year. The
petitioner would fall under this category. Clause (c) amplifies the
time limit for escaped assessment to 16 years only to those assets
located outside India. The assets of the petitioner are not located
outside India. Therefore, it would fall within the rigour of Section
149(1)(b) of the Act, which is maximum 6 years.
28
THE JURISDICTION:
11. In the case at hand, the reopening of assessment is for
the assessment year 2008-2009. The notice is issued for the year
2019. 10 years have elapsed. Section 149(1)(a) or (b) is a clear
bar. Though the provision begins with a non obstante clause, it is
hedged with conditions. Section 150 enables the revenue to reopen
an assessment pursuant to an order in appeal, but on twin
conditions. The "twin conditions" are to give effect to any finding
or direction. The statutory power can be deviated only on the
aforesaid twin conditions. The revenue would force the
proceedings open by brandishing Section 150, yet the law is
clear. Section 150 is not a passport to wander beyond
limitation at will. It is a narrow and guarded doorway
opened only by a finding or a direction of an appellate or
revisional authority that necessitates such reopening. A
direction cannot be termed as a casual suggestion, it is a
mandate, a command that brooks no discretion. Likewise, a
finding is no passing observation, it is the very conclusion,
without which an appellate decision cannot stand. In the
case at hand, there is neither. The Tribunal's words - 'may
29
proceed in accordance with law', are but an echo of the
statute itself, not an enlargement of power. Therefore, Section
149 would undoubtedly kick in, unless the twin conditions are
satisfied. The satisfaction of twin conditions and their interpretation
need not detain this Court for long or delve deep into the matter.
11.1. The Apex Court in the case of RAJINDER NATH v.
COMMISSIONER OF INCOME-TAX1, DELHI, interprets Section
153 which is Section 150 under the Finance Act, 2018. The Apex
Court holds as follows:
".... .... .....
10. The case has been dealt with throughout on the basis
that if Section 153(3)(ii) of the Act applies, and the bar of
limitation thereby removed, it is immaterial that the
assessments have been made under Section 147(a) of the Act.
The question, therefore, is whether Section 153(3)(ii) can be
invoked. It is not contended on behalf of the assessees
that they are not covered by the expression "any person"
in Section 153(3)(ii) of the Act. The only contention is
that there is no "finding" or "direction" within the
meaning of Section 153(3)(ii) of the Act in the order of
the Appellate Assistant Commissioner in consequence of
which or to give effect to which the impugned
assessments have been made.
11. The expression "finding" and "direction" are
limited in meaning. A finding given in an appeal, revision
or reference arising out of an assessment must be a
1
(1979) 120 ITR 14 (SC)
30
finding necessary for the disposal of the particular case,
that is to say, in respect of the particular assessee and in
relation to the particular assessment year. To be a
necessary finding, it must be directly involved in the
disposal of the case. It is possible in certain cases that in
order to render a finding in respect of A, a finding in
respect of B may be called for. For instance, where the facts
show that the income can belong either to A or B and to no one
else, a finding that it belongs to B or does not belong to B would
be determinative of the issue whether it can be taxed as A's
income. A finding respecting B is intimately involved as a step in
the process of reaching the ultimate finding respecting A. If,
however, the finding as to A's liability can be directly arrived at
without necessitating a finding in respect of B, then a finding
made in respect of B is an incidental finding only. It is not a
finding necessary for the disposal of the case pertaining to A.
The same principles seem to apply when the question is whether
the income under enquiry is taxable in the assessment year
under consideration or any other assessment year. As regards
the expression "direction" in Section 153(3)(ii) of the Act, it is
now well settled that it must be an express direction necessary
for the disposal of the case before the authority or court. It
must also be a direction which the authority or court is
empowered to give while deciding the case before it. The
expressions "finding" and "direction" in Section 153(3)(ii) of the
Act must be accordingly confined. Section 153(3)(ii) is not a
provision enlarging the jurisdiction of the authority or court. It is
a provision which merely raises the bar of limitation for making
an assessment order under Section 143 or Section 144 or
Section 147. ITO v. MurlidharBhagwan Das [AIR 1965 SC 342:
(1964) 6 SCR 411: (1964) 52 ITR 335] and N. Kt.
SivalingamChettiar v. CIT [(1967) 66 ITR 586 (SC)]. The
question formulated by the Tribunal raises the point whether the
Appellate Assistant Commissioner could convert the provisions
of Section 147(1) into those of Section 153(3)(ii) of the Act. In
view of Section 153(3)(ii) dealing with limitation merely, it is
not easy to appreciate the relevance or validity of the point.
.... .... ....
13. It is also not possible to say that the order of
the Appellate Assistant Commissioner contains a
direction that the excess should be assessed in the hands
31
of the co-owners. What is a "direction" for the purposes of
Section 153(3)(ii) of the Act has already been discussed. In any
event, whatever else it may amount to, on its very terms the
observation that the Income Tax Officer "is free to take
action" to assess the excess in the hands of the co-
owners cannot be described as a "direction". A direction by
a statutory authority is in the nature of an order requiring
positive compliance. When it is left to the option and
discretion of the Income Tax Officer whether or not to
take action it cannot, in our opinion, be described as a
direction."
(Emphasis supplied)
The Apex Court holds that if the Tribunal or any Authority would
direct reopening of an assessment, it becomes a direction by a
statutory authority and it is in the nature of an order requiring
positive compliance. But, when it is left to the option and discretion
of the Income Tax Officer whether or not to take action, it cannot
be described as a direction. The order of the Tribunal is afore-
quoted. It nowhere directs reopening of the assessment. It only
reserves liberty to act in accordance with law. To put it plain, on
the bedrock of the principle laid down by the Apex Court, the
words 'may proceed in accordance with law' cannot be
transmuted into a licence to breach the barricade of
limitation.
32
11.2. The next condition is finding. The Apex Court holds the
expression 'finding' is limited in its meaning. A finding given in an
appeal, revision or reference arising out of an assessment must be
a finding necessary for the disposal of a particular case. The
finding, in the case at hand, was in favour of the assessee and not
in favour of the revenue. The finding, therefore, is limited to the
reasons rendered to quash the proceedings. That, in the considered
view of the Court, cannot become a finding for reopening an
assessment, in the teeth of bar under Section 149 of the Act.
Section 149 supra clearly bars, if four years have elapsed from the
end of relevant assessment year, or 6 years in terms of clause (b),
which is the only clause that would become applicable to the case
of the petitioner, which restricts the period to 6 years. The order of
the Tribunal cannot be interpreted to mean that liberty was
reserved to act contrary to the statute. Liberty was reserved to act
in accordance with the Act. Therefore, the liberty can be exercised
within the four corners of the statute. The statute empowers any
reopening of assessment to a stretchable limit of 6 years, 4 years
being the primary limit, which is stretchable to 6 years under
certain circumstances.
33
11.3. Jurisprudence is replete by this Court or other High
Courts, following the judgment of RAJINDER NATH supra, which I
deem it appropriate to notice. A Division Bench of this Court in the
case of PRINCIPAL COMMISSIONER OF INCOME TAX-7 v.
M/S TALLY INDIA PRIVATE LIMITED2, following RAJINDER
NATH supra holds as follows:
".... .... ....
8. The Supreme Court in 'RAJINDER NATH VS.
COMMISSIONER OF INCOME-TAX', (1979) 2 TAXMAN 204
(SC) and 'INCOME-TAX OFFICER VS. MURLIDHAR
BHAGWAN DAS', (1964) 52 ITR 335 (SC), supra has held
that a finding given in an appeal, revision or reference
arising out of an assessment must be a finding necessary
for disposal of a particular case. Similarly, a direction
must be an expressed direction necessary for disposal of
the case before authority of court and must also be a
direction which the authority of court is empowered to
give while deciding a case before it. Thus, it is evident
that the order dated 07.03.2012 passed by learned Single
Judge of this court neither contains any finding nor any
direction.
9. The proceedings were stayed for a period from
08.12.2011 to 07.03.2012 i.e., for a period of 103 days and if
period of 103 days is added, and a period of 60 days as
prescribed in proviso to Section 153(4) is added, the draft order
ought to have been passed by the Assessing Officer upto
06.05.2012, whereas, in the instant case, the draft order has
been passed on 05.07.2012 and therefore, the draft order is
barred by limitation and no fault can be found with the finding of
the tribunal.
2
ITA 307 of 2018 decided on 06-04-2021
34
In view of preceding analysis, the substantial questions of
law are answered against the revenue and in favour of the
assessee. In the result, we do not find any merit in the appeal,
the same fails and is hereby dismissed."
(Emphasis supplied)
11.4. A Division Bench of the High Court of Bombay in the
case of LOTUS INVESTMENTS LIMITED v. G.Y.WAGH,
ASSISTANT COMMISSIONER OF INCOME-TAX3, again following
RAJINDER NATH supra has held as follows:
".... .... ....
31. Under section 150 of the Act, irrespective of the
limitation prescribed under section 149, reassessment
proceedings can be initiated at any time if the initiation of
reassessment is in consequence of or to give effect to any
finding or direction contained in any order passed by any
authority under the Act by way of appeal, reference or revision
or by a court in any proceedings under any other law. While
construing similar provisions contained in the 1922 Act, the
apex court in the case of ITO v. Murlidhar Bhagwan Das [1964]
52 ITR 335 held that the word "finding" can be only that which
is necessary for the disposal of an appeal in respect of an
assessment of a particular year. The apex court further held
that the appellate authority may incidentally find that the
income belongs to another year, but that is not a finding
necessary for the disposal of an appeal in respect of the
assessment year in question. Similarly, the expression
"direction" has been construed by the apex court to mean a
direction which the appellate or revisional authority as the case
may be, is empowered to give under the sections mentioned
therein. In the present case, the Commissioner of Income-tax
(Appeals) has neither given a finding to the effect that the
3
(2007) 288 ITR 459 (Bombay)
35
income chargeable to tax has escaped assessment nor given
any direction to the Income-tax Officer to initiate reassessment
proceedings for the block period by issuing notices under section
148 of the Act. The clear finding recorded by the Commissioner
of Income-tax (Appeals) is that there is no evidence or any
material found during the search proceedings on the basis of
which undisclosed income can be computed under section
158BC of the Act. The Commissioner of Income-tax (Appeals)
has recorded a finding (see page 141 of the petition) that even
the statements recorded in the form of preliminary or final
statements do not show any admission by Mr. Stany Saldanha
(director of the assessee) which can be used as a material
relatable to any evidence found on September 17, 1998, as
none was found on that date. It is further held (see page 142 of
the petition) that there is nothing in the statement expressing
any doubt for non-genuineness of the loan transaction as also
disallowance of depreciation on fixed assets. In these petitions,
we are not called upon to decide the correctness of the above
findings recorded by the Commissioner of Income-tax (Appeals).
The above observations of the Commissioner of Income-tax
(Appeals) may be erroneous and may be set aside by the
Income-tax Appellate Tribunal while disposing of the appeal filed
by the Revenue. That is a different matter. But as the
findings recorded by the Commissioner of Income-tax
(Appeals) stand today, there is no evidence or material
on record to hold that income has escaped assessment
and there is no direction to the Income-tax Officer to
initiate reassessment proceedings. Therefore, the
contention of the Revenue that the Commissioner of
Income-tax (Appeals) has given a finding and a direction
to reopen the assessments cannot be accepted.
32. The fact that the Commissioner of Income-tax
(Appeals) in his order dated December 24, 2004, has observed
that the Assessing Officer is free to look into and consider the
disallowances under section 148 of the Act in the relevant
assessment years in terms of section 150(1) read with
Explanation 2 to section 153 cannot be construed to be a
direction to reopen the assessments so as to issue reassessment
notices even after the expiry of six years from the end of the
relevant assessment years, as contemplated under section 150
of the Act. The above observations made by the Commissioner
of Income-tax (Appeals) can at best be said to be a suggestion
36
made to the Assessing Officer to consider as to whether such
disallowances could be made by initiating reassessment
proceedings. If the findings given by the Commissioner of
Income-tax (Appeals) were that there is evidence or material on
record to suggest that income has escaped assessment but the
same cannot be brought to tax in the block assessment and
accordingly if any directions were given for reopening of the
assessments then it would be a totally different matter.
However, in the present case, the Commissioner of Income-tax
(Appeals) has given a clear finding that there is no evidence or
material on record to sustain the additions and, hence, the
Commissioner of Income-tax (Appeals) could not have given
directions to the Income-tax Officer to initiate reassessment
proceedings. Therefore, the contention of the Revenue that the
Commissioner of Income-tax (Appeals) has directed the
Assessing Officer to initiate reassessment proceedings cannot be
accepted.
33. As held by the apex court in the case of Rajinder
Nath [1979] 120 ITR 14, the observations of the
Commissioner of Income-tax (Appeals) that the Income-
tax Officer is free to look into and consider the
disallowances, would simply mean, giving an option and
discretion to the Income-tax Officer to take or not to take
action as he deems fit and such an observation cannot be
said to be a "direction" given by the Commissioner of
Income-tax (Appeals) as contemplated under section 150
of the Act.
34. The decisions of this court in the case of CIT v.
Vikram A. Doshi [2002] 256 ITR 129 and CIT v. Ghodawat Pan
Masala Products P. Ltd. [2001] 250ITR 570 were relied upon by
counsel for the Revenue in support of his contention that the
disallowances in question were liable to be made in regular
assessment and not in the block assessment. In both these
cases neither the scope of reassessment proceedings nor the
powers of the Commissioner of Income-tax (Appeals) to direct
the Income-tax Officer to initiate reassessment proceedings was
an issue. In any event, once it is held that the Commissioner of
Income-tax (Appeals) has not given any finding or direction for
reopening the assessments, the extended period of limitation
contained in section 150 of the Act is not available to the
37
Revenue. Therefore, these two decisions do not support the
case of the Revenue. As stated earlier, the findings recorded by
the Commissioner of Income-tax (Appeals) may be erroneous,
but till it is reversed, it is not open to the Revenue to contend
that the Commissioner of Income-tax (Appeals) has given a
finding that the income has escaped assessment and has
directed initiation of reassessment proceedings. Reliance placed
by the Revenue on the decision of the Allahabad High Court in
the case of Ashwani Dhingra [2005] 276 ITR 98 is also
misplaced because in that case, the High Court had granted
interest on the compensation awarded under the Land
Acquisition Act. Since the interest on compensation was in the
nature of income it was held that the reopening of the
assessment was valid. In the present case, the facts are
altogether different. In the present case, the Commissioner of
Income-tax (Appeals) has held that there is no evidence or
material on record to make additions and consequently there is
no question of the Commissioner of Income-tax (Appeals)
directing initiation of reassessment proceedings.
35. Apart from the above, section 150(1) of the Act
provides that the power to issue notice under section 148
of the Act in consequence of or giving effect to any
finding or direction of the appellate/revisional authority
or the court is subject to the provision contained in
section 150(2) of the Act. Section 150(2) provides that
directions under section 150(1) of the Act cannot be
given by the appellate/revisional authority or the court if
on the date on which the order impugned in the appeal
was passed, the reassessment proceedings had become
time-barred. In other words, as per section 150(2) of the
Act, the Commissioner of Income-tax (Appeals) could
give directions for reassessment only in respect of those
assessment years in respect of which reassessment
proceedings could be initiated on the date of passing of
the block assessment order on September 29, 2000. In
the present case, on the date of passing of the block
assessment order on September 29, 2000, the
assessments for most of the assessment years had
become timebarred and, therefore, even if the
Commissioner of Income-tax (Appeals) were to give any
directions, the same would be hit by section 150(2) of
the Act. In any event, in the present case, the
38
Commissioner of Income-tax (Appeals) has not given any
finding or direction for reopening of the assessments and,
therefore, the provisions of section 150 of the Act are not
applicable, consequently, the impugned notices which are
time-barred under section 149 of the Act are without
jurisdiction and are liable to be quashed and set aside.
Once it is held that the Commissioner of Income- tax
(Appeals) has not given any finding or direction for
reopening the assessment, the benefit of Explanation 2 to
section 153 of the Act would not be available to the
Revenue.
36. It was contended on behalf of the Revenue that if the
reassessment proceedings are allowed to be continued during
the pendency of the appeal filed by the Revenue before the
Income-tax Appellate Tribunal against the order of the
Commissioner of Income-tax (Appeals), no prejudice would be
caused to the assessee. This argument is wholly misconceived.
The validity of the impugned notices cannot be decided on the
basis of the prejudice that may or may not be caused to the
assessee. Whether any prejudice is caused or not, if the notices
are without jurisdiction, they are liable to be quashed and set
aside.
37. As stated earlier, the validity of the order passed by
the Commissioner of Income-tax (Appeals) is not questioned in
these petitions and, therefore, we are not expressing any
opinion on the merits regarding the allowability or disallowability
of bank interest and depreciation. In these writ petitions, we
are only concerned with the issue as to whether the
impugned notices have been issued pursuant to the
directions of the Commissioner of Income-tax (Appeals).
Once we hold that no directions have been given by the
Commissioner of Income-tax (Appeals) for reopening the
assessments, the benefit of section 150 is not available to
the Revenue and the impugned notices which are time-
barred under section 149 of the Act are liable to be
quashed. Though the notice issued under section 148 of
the Act for the assessment year 1999-2000 falls within
six years from the end of the assessment, in view of the
fact that the Assessing Officer has not obtained approval
of the Chief Commissioner of Income-tax/Commissioner
of Income-tax before issuing the notices as contemplated
39
under section 151 of the Act, notice for the assessment
year 1999-2000 is also time-barred.
38. For all the aforesaid reasons, the reopening of the
assessments for the assessment year 1989-90 to the
assessment year 1999-2000 are quashed and set aside."
(Emphasis supplied)
11.5. A Division Bench of the High Court of Delhi in the case
of ORCHID INFRASTRUCTURE DEVELOPERS (P) LIMITED v.
PRINCIPAL COMMISSIONER OF INCOME-TAX4, has held as
follows:
".... .... ....
30. The issue regarding the impermissibility of two
assessment orders for a particular assessment year was also
highlighted in AbhisarBuildwell (P) Ltd.
case [CIT v. AbhisarBuildwell (P) Ltd., (2024) 2 SCC
433 : (2023) 454 ITR 212] , wherein, in para 34, it was held as
under (454 ITR p. 246): (SCC p. 462, para 34)
"34.If the submission on behalf of the Revenue that in
case of search even where no incriminating material is found
during the course of search, even in case of
unabated/completed assessment, the Assessing Officer can
assess or reassess the income/total income taking into
consideration the other material is accepted, in that case, there
will be two assessment orders, which shall not be permissible
under the law. At the cost of repetition, it is observed that the
assessment under Section 153-A of the Act is linked with the
search and requisition under Sections 132/132-A of the Act.
The object of Section 153-A is to bring under tax the
undisclosed income which is found during the course of search
or pursuant to search or requisition. Therefore, only in a case
4
(2024) 465 ITR 591 (Delhi)
40
where the undisclosed income is found on the basis of
incriminating material, the Assessing Officer would assume the
jurisdiction to assess or reassess the total income for the entire
six years block assessment period even in case of
completed/unabated assessment. As per the second proviso to
Section 153-A, only pending assessment/reassessment shall
stand abated and the Assessing Officer would assume the
jurisdiction with respect to such abated assessments. It does
not provide that all completed/unabated assessments shall
abate. If the submission on behalf of the Revenue is accepted,
in that case, the second proviso to Section 153-A and sub-
section (2) of Section 153-A would be redundant and/or
rewriting the said provisions, which is not permissible under the
law."
(emphasis supplied)
31. Therefore, if the respondent was apprehensive of the
fact that the petitioner had suppressed its income before the
Income Tax Settlement Commission, it ought to have resorted
to the remedy contained in Chapter XIX-A of the Act itself on
the grounds of fraud or misrepresentation. The concept of fraud
has been jurisprudentially recognised as a concept of wide
import, and thus, availability of a challenge on the ground of
fraud could have provided an effective remedy to the
respondent, if so justified. Evidently, the respondent has failed
to seek recourse to such a remedy and rather, preferred an
appeal before this Court on altogether different aspects as
compared to the ones raised in the present petition. In any
case, the same was also dismissed vide the order dated 5-9-
2017.
32. Further, the respondent has strenuously relied upon
sub-section (1) of Section 150 of the Act in juxtaposition with
the decision in AbhisarBuildwell (P) Ltd.
case [CIT v. AbhisarBuildwell (P) Ltd., (2024) 2 SCC
433 : (2023) 454 ITR 212] , to contend that the same confers
an authority on the respondent to issue the impugned notices
and reopen the completed assessments under Sections 147 and
148 of the Act. At this juncture, it is significant to extract
Section 150 of the Act, which reads as under:
"150.Provision for cases where assessment is
in pursuance of an order on appeal, etc.--(1)
Notwithstanding anything contained in Section 149, the
41
notice under Section 148 may be issued at any time for the
purpose of making an assessment or reassessment or
recomputation in consequence of or to give effect to any
finding or direction contained in an order passed by any
authority in any proceeding under this Act by way of appeal,
reference or revision or by a court in any proceeding under
any other law.
(2) The provisions of sub-section (1) shall not apply
in any case where any such assessment, reassessment or
recomputation as is referred to in that sub-section relates to
an assessment year in respect of which an assessment,
reassessment or recomputation could not have been made
at the time the order which was the subject-matter of the
appeal, reference or revision, as the case may be, was
made by reason of any other provision limiting the time
within which any action for assessment, reassessment or
recomputation may be taken."
33. The aforesaid Section 150(1) of the Act, which
begins with a non obstante clause to outweigh the
mandate of Section 149 of the Act, stipulates that a
notice under Section 148 of the Act may be issued at any
time to give effect to any finding or direction contained in
an order passed byany authority in any proceeding under
this Act by way of appeal, reference or revision or by a
court in any proceeding under any other law. Reliance has
been placed by the respondent on para 14(iv)
in AbhisarBuildwell (P) Ltd. case [CIT v. AbhisarBuildwell (P)
Ltd., (2024) 2 SCC 433 : (2023) 454 ITR 212] to consider it as
a direction or finding of the court to issue the impugned notices.
The relevant extract of the said decision is culled out as under
(454 ITR p. 247): (SCC p. 463, para 36.4)
"36.4. In case no incriminating material is unearthed
during the search, the Assessing Officer cannot assess or
reassess taking into consideration the other material in
respect of completed assessments/unabated assessments.
Meaning thereby, in respect of completed/unabated
assessments, no addition can be made by the Assessing
Officer in the absence of any incriminating material found
during the course of search under Sections 132 or
requisition under Section 132-A of the Act, 1961. However,
the completed/unabated assessments can be reopened by
the Assessing Officer in exercise of powers under Sections
42
147/148 of the Act, subject to fulfilment of the conditions as
envisaged/mentioned under Section 147/148 of the Act and
those powers are saved."
(emphasis supplied)"
(Emphasis supplied)
11.6. In its recent judgment, the High Court of Delhi, in the
case of SANJAY SINGHAL v. ASSISTANT COMMISSIONER OF
INCOME-TAX5, has considered the entire spectrum and has held
as follows:
".... .... ....
12. We are unable to accept that the decision of this
court in ITA No. 807/2023 [order dated 22.12.2023 dismissing
the Revenue's appeal] can be read as findings and directions
within the meaning of Section 150 of the Act, to permit the
Revenue to issue notices under Section 148 of the Act, beyond
the period as stipulated under Section 149(1) of the Act. The
said issue is also covered by the decision of this court in ARN
Infrastructures India Ltd. v. Assistant Commissioner of Income
Tax Cental Circle-28 Delhi : Neutral Citation No. : 2024 : DHC :
7423-DB. The relevant observations of the said decision are set
out below:
"38. It is pertinent to note that a reference to
Sections 147 and 148 of the Act in AbhisarBuildwell firstly
appears in paragraph 33 of the report and where the
Supreme Court observed that in cases where a search does
not result in any incriminating material being found, the
only remedy that would be available to the Revenue would
be to resort to reassessment.
39. However, the Supreme Court caveated that
observation by observing that the initiation of reassessment
would be ".....subject to fulfilment of the conditions
5
(2025) 303 Taxman 35 (Delhi)
43
mentioned in Sections 147/148, as in such a situation, the
Revenue cannot be left with no remedy". This sentiment
came to be reiterated with the Supreme Court observing
that the power of the Revenue to initiate reassessment
must be saved failing which it would be left with no remedy.
It was thereafter observed in paragraph 36.4 of the report
that insofar as completed or unabated assessments were
concerned, they could be reopened by the AO by invocation
of Sections 147/148 of the Act, subject to the fulfillment of
the conditions "......as envisaged/mentioned under Sections
147/148 of the Act and those powers are saved".
40. It thus becomes apparent that the liberty which
the Supreme Court accorded and the limited right inhering
in the Revenue to initiate reassessment was subject to that
power being otherwise compliant with the Chapter
pertaining to reassessment as contained in the Act. The
observations of the Supreme Court cannot possibly be read
or construed as a carte blanche enabling the respondents to
overcome and override the restrictions that otherwise
appear in Section 149 of the Act. The observations of the
Supreme Court in AbhisarBuildwell were thus intended to
merely convey that the annulment of the search
assessments would not deprive or denude the Revenue of
its power to reassess and which independently existed.
However, the Supreme Court being mindful of the statutory
prescriptions, which otherwise imbue the commencement of
reassessment, qualified that observation by providing that
such an action would have to be in accordance with law.
This note of caution appears at more than one place in that
judgment and is apparent from the Supreme Court
observing that the power to reassess would be subject to
the fulfilment of the conditions mentioned in Sections 147
and 148 of the Act.
41. We also bear in mind the order passed on the
Miscellaneous Application which was moved by the Revenue
before the Supreme Court and more particularly to the
prayers that were made therein. The Revenue had
specifically alluded to Section 150 of the Act and sought
appropriate clarifications enabling it to proceed afresh. It
had also sought the liberty to commence proceedings for
reassessment within 60 days of the disposal of that
application. The said application, however, came to be
dismissed with it being left open to the respondents to
move a formal application for review, if so chosen and
44
advised. It appears, however, that no such review was
ultimately moved.
42. Regard must also be had to the judgment
rendered in the batch of U.K. Paints, and where while
according liberty to the respondents to initiate
reassessment, the Supreme Court pertinently observed that
the same would be subject to the proposed action being in
accordance with law and if "permissible in law". Thus,
neither AbhisarBuildwell nor U.K. Paints are liable to be read
as enabling the respondents to overcome the statutory bar
of limitation which may have come into play. Those
judgments cannot possibly be construed as freeing the
respondents from the obligation of independently
establishing that the proposed action for reassessment
would otherwise be in accordance with law.
43. We had in Sumitomo Corporation also taken note
of the aspect of limitation and where the respondents had
sought to contend that a finding or direction would enable
them to overcome the time frames erected by virtue of
Section 144C of the Act. An argument, again founded on
Section 150, came to be negated with the Court observing
that a direction would have to necessarily be in accordance
with the scheme of the Act and the statutory prescriptions
comprised therein. It was further observed that it would be
wholly incorrect for courts to extend a period of limitation
that otherwise stands prescribed in the Act.
44. As was explained in Sumitomo Corporation, the
expression "finding" as occurring in Section 150 of the Act is
liable to be understood to be a conclusion or a decision of
an authority or tribunal rendered in the context of a
particular case and essential for determining the grant of
relief. A "direction", we had held, would constitute one
which an authority was empowered to issue under the Act.
Tested on those precepts, we find ourselves unable to
countenance the observations appearing in Abhisar
Buildwell as amounting to a finding since the principal
question in those appeals was with respect to the validity of
the search assessments which were undertaken. The
Supreme Court had, in order to balance equities,
additionally observed that it would be open for the Revenue
to commence reassessment, if otherwise permissible in law.
That observation cannot be viewed as amounting to a
direction which would enable the respondents to overcome
the prescription of limitation which otherwise applied."
45
13. In view of the above, the contention that the
time period, within which a notice can be issued under
Section 148 of the Act as stipulated under Section 149(1)
of the Act, is not applicable in the facts of the case, is
unmerited.
14. The petition is accordingly allowed and the
impugned order dated 24.09.2024 under Section 148A(3)
of the Act and the impugned notice issued under Section
148 of the Act for A.Y. 2015-2016 are set aside."
(Emphasis supplied)
In the light of the law being unequivocal, as noted hereinabove by
the Apex Court, this Court and Bombay and Delhi High Courts, what
would unmistakably emerge is, that the notice so issued suffers
from want of statutory mandate, as the statutory bar under Section
149 of the Act, is all pervasive in the subject proceedings.
Therefore, the impugned action commencing from the issuance of
show cause notice, does suffer from want of jurisdiction qua
limitation, as limitation undoubtedly is a question of
jurisdiction and answer to the question of jurisdiction is
always either "yes" or a "no", it can never be a "may be".
The issue is thus answered in favour of the assessee.
46
Issue No.2:
(ii) Whether the writ petitions calling in question the
notices issued would be maintainable and
entertainable before this Court, in exercise of its
jurisdiction under Article 226 of the Constitution
of India, in the teeth of availability of an
alternative remedy?
12. The revenue strenuously contends that the petition
is neither maintainable nor entertainable, in the light of the
alternative statutory remedy within the department, to
challenge the notice so issued and proceedings taken in
furtherance of the notice. The issue is with regard to
proceedings springing under Section 148 supra, which is a
bar under Section 149 of the Act. It is therefore, an issue,
concerning jurisdiction, which would go to the root of the
matter. Jurisdiction is the very life blood of a notice under
Section 148 and when jurisdiction is absent, the writ Court
will not stand aside, by showing the doors of exit to a
litigant who projects lack of jurisdiction as a ground of
47
challenge, in the teeth of subsistence of an alternative
remedy. In the light of answer to issue No.1, the impugned
proceedings is a proceeding wanting in jurisdiction qua
limitation. The limitation is under Section 149, if the notice is
issued beyond the time limit prescribed under Section 149 as
answered in issue No.1, it becomes a notice without
jurisdiction and if it is a notice without jurisdiction, a writ
petition challenging such action, which is wanting in
jurisdiction, would become not only maintainable, but
entertainable as well. The issue is no longer res integra.
12.1. Jurisprudence is replete with the Apex Court considering
the issue of maintainability and entertainability of a petition which
is placed before the constitutional Court projecting action of the
State suffering from want of jurisdiction. The Apex Court, in the
case of WHIRLPOOL CORPORATION v. REGISTRAR OF TRADE
MARKS6, holds as follows:
".... .... ....
6
(1998) 8 SCC 1
48
14. The power to issue prerogative writs under Article
226 of the Constitution is plenary in nature and is not limited by
any other provision of the Constitution. This power can be
exercised by the High Court not only for issuing writs in the
nature of habeas corpus, mandamus, prohibition, quo warranto
and certiorari for the enforcement of any of the Fundamental
Rights contained in Part III of the Constitution but also for
"any other purpose".
15. Under Article 226 of the Constitution, the High
Court, having regard to the facts of the case, has a
discretion to entertain or not to entertain a writ petition.
But the High Court has imposed upon itself certain
restrictions one of which is that if an effective and
efficacious remedy is available, the High Court would not
normally exercise its jurisdiction. But the alternative
remedy has been consistently held by this Court not to
operate as a bar in at least three contingencies, namely,
where the writ petition has been filed for the
enforcement of any of the Fundamental Rights or where
there has been a violation of the principle of natural
justice or where the order or proceedings are wholly
without jurisdiction or the vires of an Act is challenged.
There is a plethora of case-law on this point but to cut
down this circle of forensic whirlpool, we would rely on
some old decisions of the evolutionary era of the
constitutional law as they still hold the field."
(Emphasis supplied)
12.2. The Apex Court, in a judgment rendered in the year
2023, elucidates the twin concepts of maintainability and
entertainability. The Apex Court in the case of GODREJ SARA
49
LEE LTD., v. EXCISE AND TAXATION OFFICER-CUM-
ASSESSING AUTHORITY7, has held as follows:
".... .... ....
4. Before answering the questions, we feel the urge
to say a few words on the exercise of writ powers
conferred by article 226 of the Constitution having come
across certain orders passed by the High Courts holding
writ petitions as "not maintainable" merely because the
alternative remedy provided by the relevant statutes has
not been pursued by the parties desirous of invocation of
the writ jurisdiction. The power to issue prerogative writs
under article 226 is plenary in nature. Any limitation on
the exercise of such power must be traceable in the
Constitution itself. Profitable reference in this regard may
be made to article 329 and ordainments of other similarly
worded articles in the Constitution. Article 226 does not,
in terms, impose any limitation or restraint on the
exercise of power to issue writs. While it is true that
exercise of writ powers despite availability of a remedy
under the very statute which has been invoked and has
given rise to the action impugned in the writ petition
ought not to be made in a routine manner, yet, the mere
fact that the petitioner before the High Court, in a given
case, has not pursued the alternative remedy available to
him/it cannot mechanically be construed as a ground for
its dismissal. It is axiomatic that the High Courts (bearing
in mind the facts of each particular case) have a
discretion whether to entertain a writ petition or not. One
of the self-imposed restrictions on the exercise of power
under article 226 that has evolved through judicial
precedents is that the High Courts should normally not
entertain a writ petition, where an effective and
efficacious alternative remedy is available. At the same
time, it must be remembered that mere availability of an
alternative remedy of appeal or revision, which the party
invoking the jurisdiction of the High Court under article
226 has not pursued, would not oust the jurisdiction of
the High Court and render a writ petition "not
7
(2023) 109 GSTR 402 : 2023 SCC OnLine SC 95
50
maintainable". In a long line of decisions, this court has
made it clear that availability of an alternative remedy
does not operate as an absolute bar to the
"maintainability" of a writ petition and that the rule,
which requires a party to pursue the alternative remedy
provided by a statute, is a rule of policy, convenience and
discretion rather than a rule of law. Though elementary,
it needs to be restated that "entertainability" and
"maintainability" of a writ petition are distinct concepts.
The fine but real distinction between the two ought not to
be lost sight of. The objection as to "maintainability"
goes to the root of the matter and if such objection were
found to be of substance, the courts would be rendered
incapable of even receiving the lis for adjudication. On
the other hand, the question of "entertainability" is
entirely within the realm of discretion of the High Courts,
writ remedy being discretionary. A writ petition despite
being maintainable may not be entertained by a High
Court for very many reasons or relief could even be
refused to the petitioner, despite setting up a sound legal
point, if grant of the claimed relief would not further
public interest. Hence, dismissal of a writ petition by a
High Court on the ground that the petitioner has not
availed the alternative remedy without, however,
examining whether an exceptional case has been made
out for such entertainment would not be proper.
5. A little after the dawn of the Constitution, a
Constitution Bench of this Court in its decision reported in
[1958] SCR 595 (State of Uttar Pradesh v. Mohammad Nooh)
had the occasion to observe as follows :
"10. In the next place it must be borne in mind that
there is no rule, with regard to certiorari as there is with
mandamus, that it will lie only where there is no other
equally effective remedy. It is well established that,
provided the requisite grounds exist, certiorari will lie
although a right of appeal has been conferred by statute,
(Halsbury's Laws of England, 3rd Edn., Vol. 11, p. 130 and
the cases cited there). The fact that the aggrieved party has
51
another and adequate remedy may be taken into
consideration by the superior court in arriving at a
conclusion as to whether it should, in exercise of its
discretion, issue a writ of certiorari to quash the
proceedings and decisions of inferior courts subordinate to it
and ordinarily the superior court will decline to interfere
until the aggrieved party has exhausted his other statutory
remedies, if any. But this rule requiring the exhaustion of
statutory remedies before the writ will be granted is a rule
of policy, convenience and discretion rather than a rule of
law and instances are numerous where a writ of certiorari
has been issued in spite of the fact that the aggrieved party
had other adequate legal remedies.. . ."
6. At the end of the last century, this court in
paragraph 15 of its decision reported in (1998) 8 SCC 1
(Whirlpool Corporation v. Registrar of Trade Marks,
Mumbai) carved out the exceptions on the existence
whereof a writ court would be justified in entertaining a
writ petition despite the party approaching it not having
availed the alternative remedy provided by the statute.
The same read as under :
(i) where the writ petition seeks enforcement
of any of the fundamental rights ;
(ii) where there is violation of principles of
natural justice ;
(iii) where the order or the proceedings are
wholly without jurisdiction ; or
(iv) where the vires of an Act is challenged.
7. Not too long ago, this court in its decision reported in
[2021] SCC Online SC 884 (Assistant Commissioner of State Tax
v. Commercial Steel Limited)* has reiterated the same
principles in paragraph 11.
52
8. That apart, we may also usefully refer to the decisions
of this Court reported in (1977) 2 SCC 724 (State of U. P. v.
Indian Hume Pipe Co. Ltd.)** and (2000) 10 SCC 482 (Union of
India v. State of Haryana). What appears on a plain reading
of the former decision is that whether a certain item falls
within an entry in a sales tax statute, raises a pure
question of law and if investigation into facts is
unnecessary, the High Court could entertain a writ
petition in its discretion even though the alternative
remedy was not availed of ; and, unless exercise of
discretion is shown to be unreasonable or perverse, this
Court would not interfere. In the latter decision, this
court found the issue raised by the appellant to be
pristinely legal requiring determination by the High Court
without putting the appellant through the mill of
statutory appeals in the hierarchy. What follows from the
said decisions is that where the controversy is a purely
legal one and it does not
* (2021) 93 GSTR 1 (SC).
** (1977) 39 STC 355 (SC).
involve disputed questions of fact but only questions of law, then it
should be decided by the High Court instead of dismissing the writ
petition on the ground of an alternative remedy being available.
(Emphasis supplied)
The Apex Court holds that a writ petition challenging a notice would
be maintainable notwithstanding availability of an alternative
remedy, if the action suffers from want of jurisdiction, inter alia.
The petitions, therefore, cannot be shown the doors of exit on the
score that there is an alternate remedy within the department to
challenge the orders. Writ petition is maintainable and entertainable
53
on the aforesaid score, in terms of the law laid down by the Apex
Court in the case of WHIRLPOOL CORPORATION and GODREJ
SARA LEE supra. The said issue is answered accordingly.
13. In the light of the impugned notice issued under Section
148 suffering a bar under Section 149, qua the time limit
prescribed, it cannot be saved by addition of Section 150 to the
notice, as it does not satisfy the twin conditions with regard to
findings in furtherance of the order in appeal and the direction as
contained in Section 150 of the Act. It is upon the aforesaid frail
reed of "liberty" the revenue has hung its case, it therefore,
tumbles down. What the revenue seeks here, is to breathe
life into a proceeding that law itself has laid to rest. To
permit this, would allow Section 150 to become an
instrument of erasing limitation altogether, a course for
which neither precedent nor the statute offers sanction,
albeit, in the peculiar facts of this case. Therefore, the notice
so issued and any proceeding taken in the aftermath would crumble
under the weight of the statute, and in the result would be
54
rendered unsustainable. The unsustainability of it would lead to its
obliteration.
14. For the aforesaid reasons, the following:
ORDER
(i) Writ Petitions are allowed.
(ii) Impugned notices dated 29-03-2019 issued by the 1st
respondent and all further proceedings taken thereto by
the 2nd respondent vide Annexure ‘B’ dated
22-10-2019; Annexure ‘C’ dated 04-12-2019; and
Annexure ‘D’ dated 23-10-2019 stand obliterated.
(iii) The petitioner would be entitled to all consequential
benefits that would flow from the quashment of the
orders.
Sd/-
(M.NAGAPRASANNA)
JUDGE
bkp
CT:MJ