TMI Blog2019 (8) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... first available opportunity. Due to reasons noted hereinbefore, the issue could not be decided till now. It would, however, not be correct to state that this Court has impliedly overruled such an objection and decided to hear the petition on merits. Court also notes in this context that the Assessee has in fact succeeded in its appeal before the CIT (A) on other issues arising out of the same impugned assessment order and it is the Revenue which is now in appeal before the ITAT. There is no reason why this one other issue arising from the impugned assessment order cannot also be examined by the CIT(A). The Court is conscious that nearly three years have elapsed since the passing of the impugned assessment order. However, in view of the statement made on behalf of the Revenue that they would raise no objection regarding maintainability of the appeal u/s 246A before the the CIT (A) and would also not raise any objection regarding limitation, the Court sees no prejudice being caused to the Assessee by being relegated to the CIT (A). Most importantly, with the Revenue agreeing not to enforce the demand till the conclusion of the appellate proceedings before the CIT (A), the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -10. Mr Dev P. Bhardwaj, Central Govt. Standing Counsel for R-2 with Ms Anubha Bhardwaj, Advocate. ORDER Dr. S. Muralidhar, J.: 1. Aggrieved by one portion of the assessment order concerning the alleged liability of the Petitioner (hereafter the Assessee ) under Sections 115-QA and 115-QB of the Income Tax Act, 1961 ( Act ) in the impugned assessment order dated 31st December, 2016 passed by the Assessing Officer ( AO ) (Respondent No. 1), the Assessee has approached this Court with the present petition under Article 226 of the Constitution of India. Along with the petition, an application being CM No.3141/2017 was filed seeking interim directions to restrain the Respondents from enforcing the demand in terms of the impugned order. 2. By the impugned assessment order, inter alia, a demand was sought to be created under Section 115-QA of the Act in relation to the Assessee buying back 10 lakhs equity shares out of opening share capital of 25,68,700 shares from M/s. Genpact India Investment, Mauritius ( GII ) in two phases in May and October, 2013. The case of the Revenue was that the scheme adopted to buyback such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision under, Section 115QA, confines the levy only to transactions that are covered by it. The solitary nature of the transactions covered is the buy-back in terms of Section 11A of the Companies Act, 1956. It was submitted that in all other instances where buy-back arrangements are resorted to in accordance law, such as for approval of a scheme of compromise and arrangement under Section 391 of the Companies Act, the levy would not apply. 8. Learned counsel relied upon the order of this Court in GENPACT India (CP No. 349/2013, decided on 10.09.2013) where an identical argument was urged by the Regional Director of the Income Tax, who contended that the buy-back was contrary to law as it was meant to circumvent the provisions of Section 11A of the Companies Act. This Court had, it is pointed out, overruled the submission. Likewise, the applicant relied upon the judgment of Capgemini India (P) Ltd (Co. Scheme Petition No 434 of 2014, decided by the Bombay High Court on 28.04.2015). 9. Learned counsel for the Revenue, appearing on advance notice, has opposed the petition on the ground of the interim relief arguing that an alternative remedy under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober, 2017 at 2.15 pm for hearing, this Court made the interim order dated 25th January, 2017 absolute during the pendency of the petition. 6. Thereafter, the petition kept getting adjourned for one reason or the other and could not be taken up for hearing. Even on 22nd May, 2019 and 3rd July, 2019, adjournments were sought by the Respondent stating that the ASG, who had to appear on their behalf was in some difficulty. 7. In the rejoinder filed to the counter affidavit on the issue of maintainability of the petition, it is contended by the Assessee that since the Court had already heard the matter at some length on two occasions, and thereafter entertained the writ petition , it is clear that the Court intended to decide the matter on merits. It is further submitted that the matter raises a pure question of law regarding the interpretation of Section 115QA of the Act and that this Court should decide the said question as it will impact a number of other Assessees as well. 8. In the meanwhile, the Revenue filed CM No. 29390/2019 praying that this Court should pass an order on the maintainability of the writ petition and dismiss it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. On merits, Mr Ganesh submitted that the demand was sought to be created under Section 115-QA of the Act in relation to the Assessee buying back 10 lakhs equity shares out of the share capital of 25,68,700 shares from M/s Genpact India Investment, Mauritius ( GII ) in two phases in May and October, 2013 but it was not a buy back under Section 77 A of the CA. The buyback was pursuant to a scheme of arrangement under Section 391 of the CA which was approved by the High Court of Delhi. He referred to the fact that prior to its amendment with effect from 1st June, 2016, Explanation 1 to Section 115-QA clarified that for the purposes of the said section buyback meant purchase by a company of its own shares in accordance with the provisions of Section 77-A of the CA. The amendment to Explanation 1 by the Finance Act 2016, substituted the words Section 77-A of the Companies Act, 1956 with the words any law for the time being in force relating to companies. This amendment was expressly made effective only from 1st June, 2016. Accordingly, it is submitted that the entire demand created under Section 115-QA of the Act in respect of the above buyback of its own shares from GII was unsu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding limitation if the Assessee was to be relegated to the CIT (A). Further, the Revenue would be agreeable to the impugned demand not being enforced till the disposal of the said appeal. 16. At the outset, the Court would first like to deal with the submissions of Mr Ganesh that the impugned demand raised under Section 115-QA of the Act should not be construed as forming part of the impugned assessment order and that it is something separate from it. While it is true that the demand under Section 115-QA of the Act would be in addition to the total income, the fact of the matter is that in the present case it forms an integral part of the impugned assessment order under Section 143 (3) of the Act. Reading the assessment order as a whole, it is plain to the Court that this demand under Section 115-QA of the Act is in addition to demands under other issues, all of which form part of the impugned assessment order. In fact, Paragraph 11 of the impugned assessment order, which gives the computation of the total taxable income, includes the demands raised under all heads and it includes the demand under Section 115-QA of the Act. Therefore, it is not possible for this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial relief. In Ram and Shyam Co. vs. State of Haryana, (1985) 3 SCC 267 this Court has noticed that if an appeal is from Caesar to Caesar s wife the existence of alternative remedy would be a mirage and an exercise in futility. 18. Liberty was granted to the Assessee in the aforementioned case to file an appropriate appeal against the order of reassessment. 19. On the other hand, in Siemens Ltd v. State of Maharashtra (supra), the demand of cess against the Petitioner by means of a show cause notice ( SCN ) was challenged in a writ petition under Article 226 of the Constitution of India before the High Court of Bombay. The Bombay High Court refused to entertain the challenge to the SCN by the following short order: Challenge is to a show cause notice issued by the Corporation demanding certain payment of cess on the value of goods imported from Aurangabad and Daman. Petitioners may file their reply to the show cause notice and produce the relevant documents within two weeks. In case the order is adverse to the petitioner no recovery shall be made for a period of four weeks from the date of service of the order on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect earlier as well. The fact remains that the Respondent raised the objection at the first available opportunity. Due to reasons noted hereinbefore, the issue could not be decided till now. It would, however, not be correct to state that this Court has impliedly overruled such an objection and decided to hear the petition on merits. 24. The Court also notes in this context that the Assessee has in fact succeeded in its appeal before the CIT (A) on other issues arising out of the same impugned assessment order and it is the Revenue which is now in appeal before the ITAT. There is no reason why this one other issue arising from the impugned assessment order cannot also be examined by the CIT(A). 25. The Court is conscious that nearly three years have elapsed since the passing of the impugned assessment order. However, in view of the statement made on behalf of the Revenue that they would raise no objection regarding maintainability of the appeal under Section 246A of the Act before the the CIT (A) and would also not raise any objection regarding limitation, the Court sees no prejudice being caused to the Assessee by being relegated to the CIT (A). M ..... 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