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2022 Supreme(SC) 1961
SUPREME COURT OF INDIA
M.R. SHAH, KRISHNA MURARI, JJ.
Joint Commissioner Of Income Tax (Osd) Circle 3(3), 1, Mumbai Etc. – Appellant
Versus
Reliance Jio Infocomm Ltd. & Ors. Etc. – Respondents
Civil Appeal Diary No. 16409 Of 2021
Decided On : 09-09-2022
For the Appellant : Mr. Balbir Singh, ASG, Mr. Manish Pushkaran, Adv., Ms. Deepabali Dutta, Adv., Ms. Monica Benjamin, Adv., Mr. Samarvir Singh, Adv., Mr. Prahlad Singh, Adv., Mr. Raj Bahadur Yadav, AOR.
For the Respondents: Dr. Abhishek Manu Singhvi, Sr. Adv., Mr. K. R. Sasiprabhu, AOR, Mr. Raghav Shankar, Adv., Mr. Amey Nabar, Adv., Mr. Amit Bhandari, Adv., Mr. Vishnu Sharma A.S., Adv., Mr. Avishkar Singhvi, Adv.
Headnote:(A) Income Tax Act, 2013 - Sections 230-232 - Scheme of arrangement - Revenue's appeal regarding assessment and tax avoidance concerns dismissed due to lack of merit and significant delay - NCLT clarified that Income Tax Department may examine tax obligations resulting from scheme and retain rights in ongoing proceedings. (Paras 4-6)
(B) Appeal - Grounds of delay in filing appeals must be substantiated; in this case, the delay was 518 days and the appeal was unfounded. (Paras 2-3)
Facts of the case:
The Revenue challenged the order sanctioning a scheme by the NCLT on grounds that it would hinder tax assessments and rights. The NCLT assured that any potential tax implications would remain open for examination by the Revenue.
Findings of Court:
The NCLT and NCLAT had adequately protected the rights of the Income Tax Department, and there was no merit in the Revenue's appeal.
Issues: The main issues included the adequacy of the Revenue's apprehensions regarding tax assessment impacts and the justification for the delay in appeals.
Ratio Decidendi: The court confirmed that the scheme does not impede the Income Tax Department's authority to pursue due tax assessments and upheld the lower tribunals' assurance of protection for the Department's rights.
Result: Appeals dismissed.
| Table of Content |
|---|
| 1. hearing of the case details. (Para 1) |
| 2. assessment of tax implications and rights. (Para 2 , 3 , 4 , 5 , 6) |
| 3. dismissal of appeals on grounds of delay. (Para 7 , 8) |
ORDER :
1. We have heard Shri Balbir Singh, learned ASG appearing on behalf of the Revenue and Dr. Abhishek Manu Singhvi, learned Senior Advocate appearing on behalf of the respondents, who is on ceveat.
2. We have gone through the judgment and order passed by the National Company Law Tribunal (NCLT) as well as the judgment and order passed by the National Company Law Appellate Tribunal (NCLAT). Apart from the fact that there is huge delay of 518 days in preferring the appeals, we have also considered the case on merits.
3. The main grievance on the part of the Revenue is that the impugned orders and/or sanction of the Scheme may come in the way of the Department while framing the assessment and to that extent, interest of the Revenue will be affected.
4. However, it is required to be noted that in the order passed by the NCLT, the NCLT has already clarified that the Income Tax Department will be free to examine the aspect of any tax payable as a result of the sanction of the Scheme and in case it is found that the Scheme of arrangement ultimately results in tax avoidance or is not in accordance with the de-merger provisions of the INCOME TAX ACT , then the Income Tax Department will be at liberty to initiate appropriate course of action as per law. It is further clarified by the NCLT that any sanction to the scheme of arrangement under Sections 230 - 232 of the INCOME TAX ACT ,2013 shall not adversely affect the rights of the Income Tax Department or any past, present or future proceedings and the same has been reiterated by NCLAT in the impugned judgment and order.
5. In that view of the above, the apprehension on the part of the Revenue is not well founded.
6. The NCLT as well as the NCLAT have already clarified and protected the rights of the Income Tax Department, if any.
7. In view of the above, we see no reason to interfere with the impugned judgment and orders passed by the NCLAT as well as the NCLT.
8. With above observations, the Appeals stand dismissed on the ground of delay as well as on merits.
