Genpact India Private Limited vs Deputy Commissioner of Income Tax & Anr.

143 or Section 144, where the assessee objects:- to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed. The contingencies detailed in (ii) and (iii) hereinabove arise out of assessment proceedings under Section 143 or Section 144 of the Act but the first contingency is a standalone postulate and is not dependant purely on the assessment proceedings either under Section 143 or Section 144 of the Act. The expression “denies his liability to be assessed” is quite comprehensive to take within its fold every case where the assessee denies his liability to be assessed under the Act. [Para 11] [157-H; 158-A-D]

Commissioner of Income Tax, U.P., Lucknow v. Kanpur Coal Syndicate AIR (1965) SC 325 : [1964] SCR 85 – relied on.

1.2 Section 115QA of the Act stipulates that in case of buy back of shares referred to in the provisions of said Section, the company shall be liable to pay additional income tax at the rate of 20% on the distributed income. Any determination in that behalf, be it regarding quantification of the liability or the question whether such company is liable or not would be matters coming within the ambit of the first postulate referred to hereinabove. Similar is the situation with respect to provisions of Section 246A(1)(a) where again out of certain situations contemplated, one of them is “an order against the assessee, where the assessee denies his liability to be assessed under this Act”. The computation and extent of liability is determined under the provisions of Section 115QA of the Act. Such determination under the Act would squarely get covered under said expression. There is no reason why the scope of the such expression be restricted and confined to issues arising out of or touching upon assessment proceedings either under Section 143 or Section 144 of the Act. [Para 12] [158-E-G]

1.3 If the expression in Section 246(1)(a) or in Section 246A(1)(a) is considered as relatable to the liability of an assessee to be assessed under Section 143(3) there would be no appellate remedy in case of any determination under Section 115QA. The issues may arise not just confined to the question whether the company is liable at all but may also relate to other facets including the extent of liability and also with regard to computation. If the dispute is taken up in proceedings such as a petition under Article 226 of the Constitution, which normally would not be entertained in case of any disputed questions of fact or concerning factual aspects of the matter. The assessee may thus, not only lose a remedy of having the matter considered on factual facets of the matter but would also stand deprived of regular channels of challenges available to it under the hierarchy of fora available under the Act. Therefore, an appeal would be maintainable against the determination of liability under Section 115QA of the Act. [Paras 13 and 14] [158-H; 159-A-D]

2. There is no infirmity in the approach adopted by the High Court in refusing to entertain the Writ Petition. The submission that once the threshold was crossed despite the preliminary objection being raised, the High Court ought not to have considered the issue regarding alternate remedy, may not be correct. The first order dated 25.01.2017 passed by the High Court did record the preliminary objection but was prima facie of the view that the transactions defined in Section 115QA were initially confined only to those covered by Section 77A of the Companies Act. Therefore, without rejecting the preliminary objection, notice was issued in the matter. The subsequent order undoubtedly made the earlier interim order absolute. However, the preliminary objection having not been dealt with and disposed of, the matter was still at large. [Para 16] [161-G; 162A-B] Commissioner of Income Tax and others v. Chhabil Dass Agarwal (2014) 1 SCC 603 ; Authorised Officer, State Bank of Travancore & Anr. v. Mathew K.C. (2018) 3 SCC 85 : [2018] 1 SCR 233 ; State of U.P. v. U.P. Rajya Khanij Vikas Nigam Sangharsh Samiti and Others (2008) 12 SCC 675 : [2008] 7 SCR 536 – relied on.