TaxTMI 
TaxTMI 
2019 (8) TMI 997
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....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 shares was a colourable device to evade 'buyback distribution tax liability' under the Act. The case of the Assessee on the other hand was that the buyback of shares was pursuant to a scheme of arrangement under Section 391 of the Companies Act, 1956 ('CA') approved by the High Court of Delhi. This would, therefore, not be a 'buyback' under Section 77-A CA for the purposes of Section 115QA of the Act, as it stood at the relevant time. 3. At the outset, it requires to be noticed that the impugned order of assessment was passed under Section 143 (3) of the Act for the Assessment Year ('AY') 2014-15. The said impugned assessment order deals with certain other issues, apar....
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....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 Section 250 is available. It is submitted that though the levy, is a special one, forms part of the Income Tax Act and, therefore, the AO's order is appealable. It is argued on the merits that the restrictive nature of Section 77A, which places fetters upon the company, is sought to be circumvented, by the petitioner, through buy-back arrangements. This clearly is not permissible because the nature of the buyback far exceeds the stipulations, that has been ever applied to the petitioner had it proceeded under Section 77A of the Companies Act. In these circumstances, being a devise, the Revenue was entitled to ignore it and subject the transactions to levy. 10. Prima facie, in this Court's opinion, the non-obstante clause in Se....
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....hat 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 on the ground of the availability of an alternative remedy. 9. Mr S. Ganesh, learned Senior Counsel appearing for the Assessee, first submitted that there was no alternative remedy available to the Assessee as far as the demand created under Section 115 QA of the Act was concerned. According to him although this portion of the demand formed part of the impugned assessment order under Section 143 (3) of the Act, it was actually simply 'added' (or as he put it 'stapled') to the assessment order. He insisted that that is how the order creating the demand under Section 115 QA of the Act should be viewed. 10. To substantiate the above plea, Mr. Ganesh referred to Section 2 (45) of the Act which defines 'total income' to mean the total amount of income refer to under Section 5 of the Act, computed in the manner la....
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.... 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 unsustainable in law. 13. An additional point raised on merits by Mr Ganesh, which admittedly is not pleaded in the writ petition, is based on the recent decision dated 25th July, 2019 of the Supreme Court in CA No. 5409/2019 [Pr. Commissioner of Income Tax, New Delhi v Maruti Suzuki India Limited 2019 (10) SCALE 21]. Elaborating this point, Mr Ganesh pointed out that in the impugned assessment order, the name of the Assessee was shown "Genpact India (Now merged with 'Genpact India - Private Limited', PAN: AABCE446JB)" whereas the assessment was framed in the name of an entity which did not exist as of the date of the order since it stood merged with Genpact India Private Limited ('GIPL'). Even the PAN number in column No.3 was shown as 'AAACG9163H', which was admittedly different from the PAN number of GIPL. It is accordingly contended that the entire assessment orde....
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.... 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 Court to read this part of the order separate from the rest of the assessment order. 17. The decisions cited by both sides appear to indicate that depending on the facts of the particular case, the Supreme Court has expressed the view that the High Courts either should not have entertained the writ petition under Article 226 of the Constitution in the face of the availability of an efficacious alternative remedy or that it should have entertained the writ petition, notwithstanding the availability of such a remedy. For instance in CIT v. Chhabil Dass Agarwal (supra) where the challenge was raised in a writ petition to a notice under Section 148 of the Act and the subsequent assessment order, the Supreme Court, referring to its earlier decisions, observed as under: "15. Thus, while it can be said that this Court has recognized some exceptions to the rule of alternative remedy, i.e., where the statutory authority has not a....
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....uce 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 petitioner." 20. On the facts of the case, the Supreme Court was of the view that the authority issuing the SCN had already formed an opinion as regards the liability of the Assessee. It proceeded to observe as under: "If in passing the order the respondent has already determined the liability of the appellant and the only question which remains for its consideration is quantification thereof, the same does not remain in the realm of a show cause notice. The writ petition, in our opinion, was maintainable." 21. In Whirlpool Corporation v. Registrar of Trade Marks (supra), it was pointed out that: "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 alternati....
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....on, 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 Assessee is not going to be inconvenienced. Moreover, this Court proposes to issue directions for a time bound disposal of the appeal by the CIT (A). 26. On the additional point raised by Mr. Ganesh on whether the impugned assessment order was framed against an entity which ceased to exist at the time of passing of the impugned order, on the strength of the decision of the Supreme Court in Pr. Commissioner of Income Tax, New Delhi v Maruti Suzuki India Limited (supra), this Court leaves it open to the Assessee to raise this issue in the appeal before the CIT (A). Likewise, although the impugned assessment order does not refer to the alternative plea of the Revenue seeking to justify the impugned demand with reference to Section 2 (22) (d) of the Act, the Court leaves it open to the Revenue raise this issue before the CIT (A). 27. Accordingly, the writ petition is disposed of with the following directions: (i) The Court declines to e....