Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 317 - HC - Income TaxExtraordinary and discretionary jurisdiction of High Court - maintainability of appeal - Single Judge directing the appellant to exhaust the statutory remedy - whether the appeal requires to be decided on merit or not? - Section 115-O invoked unilaterally and without adjudication by treating the transactions as that of dividend, which would not come within the purview of Section 2(22)(d) - HELD THAT:- In issues involving fiscal statutes, extraordinary and discretionary jurisdiction of this Court available under Article 226 of the Constitution of India requires to be exercised with greater caution and very sparingly. The learned single Judge has given two findings against the appellant while holding that it is open to him to file an appeal. Though it is observed that the observations are only prima facie in nature, the writ petition was dismissed on the reasons assigned. Therefore, the findings rendered cannot be termed as prima facie as they were not mere observations. As the learned Senior Counsel appearing for the appellant submits they might militate against the appellant as substantive findings on merit. If that is the case, the appeal to be filed would be of a mere formality. Thus, the learned single Judge, in our considered view, ought not to have gone into the merits of the case. The first finding rendered by the learned single Judge is to the effect that the transactions are not mere buying back of shares but granting dividend to the shareholders. Secondly, it was held that there is no need to follow any procedure towards adjudication while invoking Section 115-O of the Act. Having given the aforesaid findings, the writ petition was accordingly dismissed. This is in our considered view cannot be sustained in the eye of law. They are not mere observations but findings on merit both on fact and law. In such view of the matter, we are of the view that the learned single Judge was not right in going to the merit while granting liberty to file an appeal. A submission is also made raising doubt over the maintainability of the appeal under Section 246-A of the Act. We have no hesitation in holding that the appeal is maintainable. The very case of the respondent is that the appellant ought to have shown its return the transactions as dividend and not capital gain. Therefore, it is a case of an improper return having been filed. Considering some what similar objection raised on a slightly different fact involving a demand raised under Section 115Q of the Act, a Division Bench of Delhi High Court in Genpact India (P) Limited Vs. Deputy Commissioner of Income-Tax (2019 (8) TMI 997 - DELHI HIGH COURT) was pleased to hold that the appeal would certainly be maintainable. Therefore, any order involving civil consequence has to be termed as final, entitling an assessee in challenging the same before the appellate forum. We also do not find any error in the order of the learned single Judge with respect to the deposit made during the pendency of the interim order as erroneous. It is only an interim arrangement directed to be made pending the appeal. In such view of the mater, while upholding the direction of the learned single Judge with respect to the deposit and the liberty granted to file an appeal are accordingly upheld. However, the findings rendered on the nature of transaction and the scope under Section 115-O of the Act are accordingly set aside. The issue as to whether the impugned order should be preceded by a procedure involving adjudication and the requirement of violation of principles of natural justice are also left open to be decided in the appeal. Accordingly, the writ appeal stands allowed in part as indicated.
|