Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 1 REPORTABLE IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.8945 OF 2019 (Arising out of Special Leave Petition (Civil) No.20728 of 2019) GENPACT INDIA PRIVATE LIMITED Appellant VERSUS DEPUTY COMMISSIONER OF INCOME TAX & ANR. Respondents JUDGMENT Uday Umesh Lalit, J. 1. Leave granted. 2. This appeal arises out of final judgment and order dated 19.08.2019 passed by High Court of Delhi at New Delhi in Writ Petition No.686 of 2017. 3. facts leading to filing of present appeal, in brief, are as under: Signature Not Verified (a) Out of opening share capital of 25,68,700 shares held by its sole Digitally signed by MUKESH KUMAR Date: 2019.11.22 15:06:13 IST Reason: shareholder and holding company Genpact India Investment, Mauritius, Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 2 appellant bought back 2,50,000 shares in May 2013 at rate of Rs.32,000/- per share for total consideration of Rs.800 crores. (b) On 10.05.2013, Chapter XIIDA consisting of Sections 115QA, 115QB and 115QC was inserted in Income Tax Act, 1961 (hereinafter referred to as Act ) by Finance Act, 2013 which came into effect from 01.06.2013. Section 115QA as it stood prior to amendment which came into effect on 01.06.2016 was to following effect: Section 115QA: Tax on distributed income to shareholders (1) Notwithstanding anything contained in any other provision of this Act, in addition to income-tax chargeable in respect of total income of domestic company for any assessment year, any amount of distributed income by company on buy-back of shares (not being shares listed on recognised stock exchange) from shareholder shall be charged to tax and such company shall be liable to pay additional income-tax at rate of twenty per cent on distributed income. Explanation. For purposes of this section, (i) "buy-back" means purchase by company of its own shares in accordance with provisions of section 77A of Companies Act, 1956 (1 of 1956); (ii) "distributed income" means consideration paid by company on buy-back of shares as reduced by amount which was received by company for issue of such shares. (2) Notwithstanding that no income-tax is payable by domestic company on its total income computed in accordance with provisions of this Act, tax on distributed income under sub-section (1) shall be payable by such company. Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 3 (3) principal officer of domestic company and company shall be liable to pay tax to credit of Central Government within fourteen days from date of payment of any consideration to shareholder on buy- back of shares referred to in sub-section (1). (4) tax on distributed income by company shall be treated as final payment of tax in respect of said income and no further credit therefor shall be claimed by company or by any other person in respect of amount of tax so paid. (5) No deduction under any other provision of this Act shall be allowed to company or shareholder in respect of income which has been charged to tax under sub- section (1) or tax thereon. Explanation in relation to buy back was, however, amended and with effect from 01.06.2016, it reads as:- (i) buy-back means purchase by company of its own shares in accordance with provisions of any law for time being in force relating to companies; (c) On 10.09.2013, scheme for arrangement was approved by High Court of Delhi in Company Petition No.349 of 2013. Pursuant thereto, appellant bought back another tranche of 7,50,000 shares at rate of Rs.35,000 per share for total consideration of Rs.2,625 crores from said Genpact India Investment, Mauritius. (d) In income tax return filed on 28.11.2014 by appellant for assessment year 2014-15, Details of tax on distributed profits of Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 4 domestic companies and its payment were given in Schedule DDT where details of aforesaid transactions were given but liability to pay any tax was denied. notice under Section 143(2) of Act was issued to appellant on 03.09.2015 seeking further explanation, pursuant to which requisite details were furnished. (e) matter was thereafter considered and assessment order was passed by first respondent on 31.12.2016. As many as 10 additions were made by first respondent, one of them being in respect of liability under Section 115QA of Act. Since we are concerned in this appeal only with issue with regard to liability under Section 115QA, we need not deal with other issues. f) As regards issue in question, submissions advanced on behalf of appellant-assessee were noted as under: Vide Letter dated 28.12.2016, assessee has submitted that buy back of shares has been done in pursuance of scheme of arrangement under Section 391 of Companies Act, 1956 approved by Hon ble High Court of Delhi and in such manner that same is not buy back in terms of Section 115QA of Act. g) matter was dealt with by first respondent as under: submission of assessee was considered but was not found acceptable as it has no substance. Before discussing facts of case and argument in support of revenue it is also important to Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 5 understand background of Section 115QA. Section 115QA was inserted by Finance Act, 2013 to counter tax avoidance practice mainly adopted by Indian subsidiaries to distribute income to shareholders to Mauritius based Holding company under garb of Buyback of shares. Under Income Tax Act, buyback of shares is taxable u/s 46A in hands of shareholders. However, taking benefit of Article 13 of India-Mauritius DTAA, which provides for capital gain arising on transfer of shares of Mauritius resident taxable in that country and under Mauritius tax laws capital gain is totally exempt, entire transaction used to escape tax net. Thus to plug this loop hole in statute, Section 115QA is introduced to provide that where shares are bought back at price higher than price at which those shares were issued then, balance amount will be treated as distribution of income to shareholder and Tax@20% will be payable by Company. Section 115QA is applicable only to domestic unlisted companies. provisions of Section 115QA have been introduced as part of Chapter XIIA as anti- avoidance measure as also with intent to widen tax base in India. explanatory Memorandum made it clear that object is to curb tax avoidant practice of unlisted companies resorting to buy-back of shares in lieu of payment of income to shareholders and which is taxable in India. Buy back tax is attracted on amounts distributed by company on buy-back of its own shares. Section 115QA overrides all sections of Act and it is separate charging section which taxes amount distributed on buy back of shares. Rejecting submission advanced on behalf of appellant, first respondent thus held that over and above nine heads under which additions were made, appellant-assessee was also liable to pay tax at Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 6 rate of 20% in terms of Section 115QA of Act in respect of distributed income of Rs.2,625 crores. h. It may be mentioned that insofar as those nine additions made by aforesaid assessment order by first respondent are concerned, appeal was filed by appellant. We have been apprised that appeal was decided in favour of appellant but further challenge at instance of Revenue is under consideration. As regards issue concerning tax under Section 115QA, appellant filed Writ Petition (Civil) No.686 of 2017 in High Court submitting, inter alia, that order passed by first respondent was without jurisdiction as buy back of shares in instant case was in pursuance of scheme of arrangement approved by High Court. i) matter came up before High Court on 25.01.2017 when preliminary objection was raised that alternate and efficacious remedy of filing appeal was available. While issuing notice it was observed by High Court: Prima facie, in this Court s opinion, non-obstante clause in Section 115QA of Act restricts nature of levy to transactions defined by provision itself. transactions defined are those covered by Section 77A of Companies Act. Significantly, Parliamentary intent to cover all manners of share Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 7 acquisition by Company of its own shares, is evident from subsequent amendment to Section 115QA of Act, when it explained meaning of buy-back in First Explanation by not alluding merely to Section 77A of Companies Act but all other provisions of law. That this provision was not given retrospective effect, in this Court s opinion, further strengthens petitioner s submissions. In view of these prima facie reasons, Court is of opinion that impugned demand to tune it seeks to recover levy under Section 115QA of Act should not be enforced till next date of hearing. It is so directed. List on 28.03.2017. j) matter thereafter came up on 30.08.2017 when interim order dated 25.01.2017 was made absolute. k) When matter was taken up after completion of pleadings, it was submitted on behalf of Revenue that since remedy of appeal was available to appellant, Writ Petition may not be entertained. On other hand, it was submitted by appellant that demand raised under Section 115QA could not be considered as forming part of assessment order passed by first respondent and it must be something separate from order of assessment. submission was, however, rejected by High Court observing as under: At outset, Court would first like to deal with submissions of Mr. Ganesh that impugned Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 8 demand raised under Section 115QA of Act should not be construed as forming part of impugned assessment order and that it is something separate from it. While it is true that demand under Section 115QA of Act would be in addition to total income, fact of matter is that in present case it forms integral part of impugned assessment order under Section 143(3) of Act. Reading assessment order as whole, it is plain to Court that this demand under Section 115QA of Act is in addition to demands under other issues, all of which form part of impugned assessment order. In fact, paragraph 11 of impugned assessment order, which gives computation of total taxable income, includes demands raised under all heads and it includes demand under Section 115QA of Act. Therefore, it is not possible for this Court to read this part of order separate from rest of assessment order. l) On issue whether Writ Petition be entertained in face of availability of alternate remedy, High Court considered relevant case law touching upon issue and observed: 23. question regarding interpretation of Section 115QA of Act, as it stood at relevant time, can definitely be gone into by CIT (A). Further, this Court has in fact not expressed any view yet on maintainability of petition, although as rightly pointed out matter was heard on this aspect earlier as well. fact remains that Respondent raised objection at first available opportunity. Due to reasons noted hereinbefore, issue could not be decided till now. It would, however, not be correct to state that this Court has impliedly overruled such objection and decided to hear petition on merits. 24. Court also notes in this context that Assessee has in fact succeeded in its appeal before Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 9 CIT (A) on other issues arising out of same impugned assessement order and it is Revenue which is now in appeal before ITAT. There is no reason why this one other issue arising from impugned assessment order cannot also be examined by CIT (A). m) High Court also recorded certain concessions made on behalf of Revenue and disposed of Writ Petition by its Judgment and Order dated 19.08.2019 with following directions: (i) Court declines to entertain this writ petition under Article 226 of Constitution against impugned demand raised by Revenue by way of impugned assessment order under Section 115QA of Act against Assessee. (ii) Assessee is granted opportunity to file appeal under Section 246-A of Act before CIT (A) to challenge impugned assessment order only insofar as it creates demand under Section 115QA of Act. (iii) If such appeal is filed within ten days from today, it will be considered on its own merits and reasoned order disposing of appeal will be passed by CIT (A) on all issues raised by Assessee, not limited to issues raised in present petition as well as on response thereto by Revenue in accordance with law. (iv) reasoned order shall be passed by CIT (A) not later than 31st October, 2019. It will be communicated to Petitioner within ten days thereafter. For period of two weeks after date of such communication of order, demand under impugned assessment order, if it is affirmed by CIT (A) in appeal, will not be enforced against Assessee. Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 10 (v) Court places on record statement of Revenue that it will not raise any objection before CIT (A) as to maintainability of such appeal and as to appeal being barred by limitation. Court also takes on record statement of Revenue that it will not enforce demand in terms of impugned assessment order till disposal of above appeal. All of above is subject to Assessee filing appeal before CIT (A) within ten days from today. (vi) It is made clear that this Court has not expressed any view whatsoever on contentions of either party on merits of case. 4. Challenge to aforesaid view taken by High Court was raised by way of Special Leave Petition No.20728 of 2019 filed in this Court on 26.08.2019. Within time limit of 10 days as afforded by High Court, appeal was also preferred by appellant without prejudice on 30.08.2019 against demand raised/order passed under Section 115QA . aforesaid Special Leave Petition came up before this Court on 06.09.2019, whereafter matter was adjourned on few occasions and then taken up for final disposal. 5. We heard Mr. Mukul Rohatgi and Mr. S. Ganesh, learned Senior Advocates for appellant and Mr. Zoheb Hossain, learned Advocate for respondents. Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 11 It was submitted by appellant that in relation to order passed under Section 115QA of Act, no right of appeal would be available under provisions of Act and as such premise on which High Court proceeded was wrong; in any case plea of existence of any alternate and efficacious remedy would be considered at threshold when writ petition is taken up for preliminary hearing; since preliminary objection was taken and despite such objection, discretion was exercised by High Court which is evident from orders dated 25.01.2017 and 30.08.2017, very same issue ought not to have weighed with High Court; that scheme of amalgamation was approved by High Court and any buy back of shares in pursuance thereof would not be covered by provisions of Section 115QA of Act. On other hand it was submitted by Revenue that any order determining liability to pay tax under Section 115QA would be appealable; any other view would entail tremendous prejudice to concerned assessees; concessions given on behalf of Revenue which were recorded in directions passed by High Court, would completely take care of any inconvenience and prejudice that could possibly arise in matter. Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 12 6. In its written submissions, appellant submitted:- I. No statutory appeal has been provided against order under section 115QA after it was introduced into statute book with effect from 01.06.2013. section 115QA order cannot possibly be equated with assessment order passed under section 143(3) against which appeal lies under section 246A. order under section 143(3) only makes assessment of total income of assessee, as defined in section 2(45) of IT Act. tax payable under section 115QA by company making buy-back is tax payable on payment made by company and not tax payable on its total income and, therefore, section 115QA does not at all speak of assessment , which is term of art in Income Tax Act, confined to determination of total income of assessee. denial of assessee s liability to be assessed in section 246A is also confined to his liability to be assessed under section 143(3) and same has nothing to do with assessee s liability to pay tax under section 115QA. II. Division Bench which admitted matter and granted interim relief had unequivocally exercised its discretion in case of Petitioner to entertain Writ Petition despite argument of alternative remedy. Further, another Division Bench also similarly exercised it s discretion again in favour of Petitioner on 26.07.2017 and 30.08.2017. It was therefore not open for another Division Bench, which heard matter on 19.08.2019 to exercise it s discretion in fundamentally different way, as compared to two earlier Division Benches . .the objection of alternative remedy can only be raised at admission stage and not at stage of final hearing, after completion of pleadings Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 13 7. Two issues arise for consideration, one regarding availability of appellate remedy and other concerning refusal to exercise Jurisdiction under Article 226 because of availability of alternate efficacious remedy. In essence, matter revolves around question whether there is in fact appellate remedy available, in case any determination is made under Section 115QA of Act that Company is liable to pay additional income tax at rate of 20% on distributed income . For purpose of considering whether there is any such appellate remedy, we must note concerned Sections in Act dealing with appellate remedy and provisions touching upon exercise of such right of appeal. Sections 246(1) and 246A(1) being relevant for present purposes are extracted hereunder:- "246. Appealable orders - (1) Subject to provisions of sub-section (2), any assessee aggrieved by any of following orders of Assessing Officer other than Joint Commissioner may appeal to Deputy Commissioner (Appeals) before 1st day of June, 2000 against such order (a) order against assessee, where assessee denies his liability to be assessed under this Act, or intimation under sub-section (1) or sub- section (IB) of section 143, where assessee objects to making of adjustments, or any order of assessment under sub-section (3) of section 143 or section 144, where assesse objects to amount of income assessed, or to amount of tax determined, or to amount of loss computed, or to status under which he is assessed; Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 14 (b) order of assessment, reassessment or recomputation under section 147 or section 150; (c) order under section 154 or section 155 having effect of enhancing assessment or reducing refund or order refusing to allow claim made by assesssee under either of said sections; (d) order made under section 163 treating assessee as agent of non-resident; (e) order under sub-section (2) or sub-section (3) of section 170; (f) order under section 171; (g) any order under clause (b) of sub-section (1) or under sub-section (2) or sub-section (3) or sub- section (5) of section 185 in respect of any assessment for assessment year commencing on or before 1st day of April, 1992; (h) any order cancelling registration of firm under sub-section (1) or under sub-section (2) of section 186 in respect of any assessment for assessment year commencing on or before 1 st day of April, 1992; (i) order under section 201; (j) order under section 216 in respect of any assessment for assessment year commencing on 1st day of April, 1988, or any earlier assessment year; (k) order under section 237; (l) order imposing penalty under- Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 15 (i) section 221, or (ii) section 271, section 271A, section 271B, section 272A, section 272AA or section 272BB; (iii) section 272, section 272B or section 273, as they stood immediately before 1st day of April, 1989, in respect of any assessment for assessment year commencing on 1st day of April, 1988, or any earlier assessment years. 246A. Appealable orders before Commissioner (Appeals). (1) Any assessee or any deductor or any collector aggrieved by any of following orders (whether made before or after appointed day) may appeal to Commissioner (Appeals) against (a) order passed by Joint Commissioner under clause (ii) of sub-section (3) of section 115VP or order against assessee where assessee denies his liability to be assessed under this Act or intimation under sub-section (1) or sub-section (1B) of section 143 or sub-section (1) of section 200A or sub-section (1) of section 206CB, where assessee or deductor or collector objects to making of adjustments, or any order of assessment under sub-section (3) of section 143 except order passed in pursuance of directions of Dispute Resolution Panel or order referred to in sub-section (12) of section 144BA or section 144, to income assessed, or to amount of tax determined, or to amount of loss computed, or to status under which he is assessed; (aa)an order of assessment under sub-section (3) of section 115WE or section 115WF, where assessee, being employer objects to value of fringe benefits assessed; (ab)an order of assessment or reassessment under section 115WG; Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 16 (b) order of assessment, reassessment or recomputation under section 147 except order passed in pursuance of directions of Dispute Resolution Panel or order referred to in sub- section (12) of section 144BA or section 150; (ba) order of assessment or reassessment under section 153A except order passed in pursuance of directions of Dispute Resolution Panel or order referred to in sub-section (12) of section 144BA; (bb)an order of assessment or reassessment under sub-section (3) of section 92CD; (c) order made under section 154 or section 155 having effect of enhancing assessment or reducing refund or order refusing to allow claim made by assessee under either of said sections except of order referred to in sub- section (12) of section 144BA; (d) order made under section 163 treating assessee as agent of non-resident; (e) order made under sub-section (2) or sub-section (3) of section 170; (f) order made under section 171; (g) order made under clause (b) of sub-section (1) or under sub-section (2) or sub-section (3) or sub- section (5) of section 185 in respect of assessment for assessment year commencing on or before 1st day of April, 1992; (h) order cancelling registration of firm under sub-section (1) or under sub-section (2) of section 186 in respect of any assessment for assessment year commencing on or before 1 st day of April, 1992, or any earlier assessment year; Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 17 (ha) order made under section 201; (hb)an order made under sub-section (6A) of section 206C; (i) order made under section 237; (j) order imposing penalty under (A) section 221; or (B) section 271, section 271A, 271AAA, 271AAB, section 271F, section 271FB, section 272AA or section 272BB; (C) section 272, section 272B or section 273, as they stood immediately before 1st day of April, 1989, in respect of any assessment for assessment year commencing on 1st day of April, 1988, or any earlier assessment years; (ja) order of imposing or enhancing penalty under sub-section (1A) of section 275; (k) order of assessment made by Assessing Officer under clause (c) of section 158BC, in respect of search initiated under Section 132 or books of account, other documents or any assets requisitioned under section 132A on or after 1st day of January, 1997; (l) order imposing penalty under sub-section (2) of section 158BFA; (m) order imposing penalty under section 271B or section 271BB; (n) order made by Deputy Commissioner imposing penalty under section 271C, section 271CA, section 271D or section 271E; Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 18 (o) order made by Deputy Commissioner or Deputy Director imposing penalty under section 272A; (p) order made by Deputy Commissioner imposing penalty under section 272AA; (q) order imposing penalty under Chapter XXI; (r) order made by Assessing Officer other than Deputy Commissioner under provisions of this Act in case of such person or class of persons, as Board may, having regard to nature of cases, complexities involved and other relevant considerations direct. Explanation. For purposes of this sub-section, where on or after 1st day of October, 1998, post of Deputy Commissioner has been redesignated as Joint Commissioner and post of Deputy Director has been redesignated as joint Director, references in this sub-section for Deputy Commissioner and Deputy Director shall be substituted by Joint Commissioner and Joint Director respectively. 8. One of key expressions appearing in Section 246(1)(a) as well as in Section 246A(1)(a) is where assessee denies his liability to be assessed under this Act. 9. Similar expression occurring in Section 30 of Income Tax, 1922 came up for consideration before this Court in Commissioner of Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 19 Income Tax, U.P., Lucknow v. Kanpur Coal Syndicate1. relevant part of Section 30(1) as quoted in decision was:- 30.(1) Any assessee objecting to amount of income assessed under Section 23 or amount of tax determined under Section 23 or denying his liability to be assessed under this Act may appeal to Appellate Assistant Commissioner against assessment or against such refusal or order: contention raised by assessee was considered as under:- Income Tax Officer may reject its contention and may assess total income of association as such and impose tax on it. Under Section 30 assessee objecting to amount of income assessed under Section 23 or amount of tax determined under said section or denying his liability to be assessed under Act can prefer appeal against order of Income Tax to Appellate Assistant Commissioner. It is said that order made by Income Tax Officer rejecting plea of association of persons that members thereof shall be assessed individually does not fall under one or other of three heads mentioned above. What is substance of objection of assesses? assessee denies his liability to be assessed under Act in circumstance of case and pleads that members of association shall be assessed only individually. expression denial of liability is comprehensive enough to take in not only total denial of liability but also liability to tax under particular circumstances. In either case denial is denial of liability to be assessed under provisions of Act. In one case accessee says that he is not liable to be assessed to tax under Act, and in other case assessee denies his liability to tax under provisions of Act if option given to appropriate officer under provisions of Act is judicially exercised. We, therefore, hold that such assessee has right of appeal under Section 30 of 1AIR (1965) SC 325 : 1964 (53) ITR 225 Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 20 Act against order of Income Tax Officer assessing association of members instead of members thereof individually. It was concluded that expression denial of liability is comprehensive enough to take in not only total denial of liability but also liability to tax under particular circumstances. 10. submission advanced on behalf of appellant, however, is that denial of assessee s liability to be assessed in Section 246A is confined to his liability to be assessed under Section 143(3) of Act and same has nothing to do with liability to pay tax under Section 115QA. According to appellant, tax payable in respect of buy back of shares under Section 115QA is not tax payable on total income . 11. We may now consider kinds of orders or situations that are referred to in Section 246(1)(a) of Act, which are:- (i) order against assessee, where assessee denies his liability to be assessed under this Act, or (ii) intimation under sub-section (1) or sub-section (1B) of Section 143 where assessee objects to making of adjustments, or Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 21 (iii) Any order of assessment under sub-section (3) of Section 143 or Section 144, where assessee objects:- to amount of income assessed, or to amount of tax determined, or to amount of loss computed, or to status under which he is assessed. contingencies detailed in (ii) and (iii) hereinabove arise out of assessment proceedings under Section 143 or Section 144 of Act but first contingency is standalone postulate and is not dependant purely on assessment proceedings either under Section 143 or Section 144 of Act. expression denies his liability to be assessed as held by this Court in Kanpur Coal Syndicate1 is quite comprehensive to take within its fold every case where assessee denies his liability to be assessed under Act. 12. Section 115QA of Act stipulates that in case of buy back of shares referred to in provisions of said Section, company shall be liable to pay additional income tax at rate of 20% on distributed income. Any determination in that behalf, be it regarding quantification of liability or question whether such company is liable or not would be Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 22 matters coming within ambit of first postulate referred to hereinabove. Similar is situation with respect to provisions of Section 246A(1)(a) where again out of certain situations contemplated, one of them is order against assessee, where assessee denies his liability to be assessed under this Act . computation and extent of liability is determined under provisions of Section 115QA of Act. Such determination under Act would squarely get covered under said expression. There is no reason why scope of such expression be restricted and confined to issues arising out of or touching upon assessment proceedings either under Section 143 or Section 144 of Act. 13. If submission of appellant is accepted and concerned expression as stated hereinabove in Section 246(1)(a) or in Section 246A(1)(a) is to be considered as relatable to liability of assessee to be assessed under Section 143(3) as contended, there would be no appellate remedy in case of any determination under Section 115QA. issues may arise not just confined to question whether company is liable at all but may also relate to other facets including extent of liability and also with regard to computation. If submission is accepted, every time dispute will be required to be taken up in proceedings such as petition under Article 226 of Constitution, which Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 23 normally would not be entertained in case of any disputed questions of fact or concerning factual aspects of matter. assessee may thus, not only lose remedy of having matter considered on factual facets of matter but would also stand deprived of regular channels of challenges available to it under hierarchy of fora available under Act. 14. We, therefore, reject submissions advanced by appellant and hold that appeal would be maintainable against determination of liability under Section 115QA of Act. 15. We now turn to question whether High Court was justified in refusing to entertain writ petition because of availability of adequate appellate remedy. law on point is very clear and was summarised in Commissioner of Income Tax and others v. Chhabil Dass Agarwal2 as under:- 11. Before discussing fact proposition, we would notice principle of law as laid down by this Court. It is settled law that non-entertainment of petitions under writ jurisdiction by High Court when efficacious alternative remedy is available is rule of self-imposed limitation. It is essentially rule of policy, convenience and discretion rather than rule of law. Undoubtedly, it is within discretion of High Court to grant relief under Article 226 despite existence of alternative remedy. However, High Court must not interfere if there is adequate efficacious alternative remedy available to 2 (2014) 1 SCC 603 Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 24 petitioner and he has approached High Court without availing same unless he has made out exceptional case warranting such interference or there exist sufficient grounds to invoke extraordinary jurisdiction under Article 226. (See State of U.P. v. Mohd. Nooh3, Titaghur Paper Mills Co. Ltd. v. State of Orissa4, Harbanslal Sahnia v. Indian Oil Corpn. Ltd.5 and State of H.P. v. Gujarat Ambuja Cement Ltd.6) 12. Constitution Benches of this Court in K.S. Rashid and Son v. Income Tax Investigation Commission7, Sangram Singh v. Election Tribunal8, Union of India v. T.R. Varma9, State of U.P. v. Mohd. Nooh3 and K.S. Venkataraman and Co. (P) Ltd. v. State of Madras10 have held that though Article 226 confers very wide powers in matter of issuing writs on High Court, remedy of writ is absolutely discretionary in character. If High Court is satisfied that aggrieved party can have adequate or suitable relief elsewhere, it can refuse to exercise its jurisdiction. Court, in extraordinary circumstances, may exercise power if it comes to conclusion that there has been breach of principles of natural justice or procedure required for decision has not been adopted. [See N.T. Veluswami Thevar v. G. Raja Nainar11, Municipal Council, Khurai v. Kamal Kumar12, Siliguri Municipality v. Amalendu Das13, S.T. Muthusami v. K. Natarajan14, Rajasthan SRTC v. Krishna Kant15, Kerala SEB v. Kurien E. Kalathil16, A. 3 AIR 1958 SC 86 4 (1983) 2 SCC 433 : 1983 SCC (Tax) 131 5 (2003) 2 SCC 107 6 (2005) 6 SCC 499 7 AIR 1954 SC 207 8 AIR 1955 SC 425 9 AIR 1957 SC 882 10AIR 1966 SC 1089 11 AIR 1959 SC 422 12 AIR 1965 SC 1321 : (1965) 2 SCR 653 13 (1984) 2 SCC 436 : 1984 SCC (Tax) 133 14 (1988) 1 SCC 572 15 (1995) 5 SCC 75 : 1995 SCC (L&S) 1207 : (1955) 31 ATC 110 16 (2000) 6 SCC 293 Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 25 Venkatasubbiah Naidu v. S. Chellappan17, L.L. Sudhakar Reddy v. State of A.P.18, Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha v. State of Maharashtra19, Pratap Singh v. State of Haryana20 and GKN Driveshafts (India) Ltd. v. ITO21.] 15. Thus, while it can be said that this Court has recognised some exceptions to rule of alternative remedy i.e. where statutory authority has not acted in accordance with provisions of enactment in question, or in defiance of fundamental principles of judicial procedure, or has resorted to invoke provisions which are repealed, or when order has been passed in total violation of principles of natural justice, proposition laid down in Thansingh Nathmal case22, Titaghur Paper Mills case4 and other similar judgments that High Court will not entertain petition under Article 226 of Constitution if effective alternative remedy is available to aggrieved person or statute under which action complained of has been taken itself contains mechanism for redressal of grievance still holds field. Therefore, when statutory forum is created by law for redressal of grievances, writ petition should not be entertained ignoring statutory dispensation. Recently, in Authorised Officer, State Bank of Travancore & Anr. v. Mathew K.C.23, principles laid down in Chhabil Dass Agarwal2 were reiterated as under: 17 (2000) 7 SCC 695 18 (2001) 6 SCC 634 19 (2001) 8 SCC 509 20 (2002) 7 SCC 484 : 2002 SCC L&S) 1207 : (1995) 31 ATC 110 21 (2003) 1 SCC 72 22 AIR 1964 SC 1419 23 (2018) 3 SCC 85 Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 26 discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in given facts of case and in accordance with law. normal rule is that writ petition under Article 226 of Constitution ought not to be entertained if alternate statutory remedies are available, except in cases falling within well-defined exceptions as observed in CIT v. Chhabil Dass Agarwal2 16. We do not, therefore, find any infirmity in approach adopted by High Court in refusing to entertain Writ Petition. submission that once threshold was crossed despite preliminary objection being raised, High Court ought not to have considered issue regarding alternate remedy, may not be correct. first order dated 25.01.2017 passed by High Court did record preliminary objection but was prima facie of view that transactions defined in Section 115QA were initially confined only to those covered by Section 77A of Companies Act. Therefore, without rejecting preliminary objection, notice was issued in matter. subsequent order undoubtedly made earlier interim order absolute. However, preliminary objection having not been dealt with and disposed of, matter was still at large. In State of U.P. v. U.P. Rajya Khanij Vikas Nigam Sangharsh Samiti and others24 this Court dealt with issue whether after admission, Writ Petition could not be dismissed on ground of alternate remedy. submission was considered by this Court as under: 24 (2008) 12 SCC 675 Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 27 38. With respect to learned Judge, it is neither legal position nor such proposition has been laid down in Suresh Chandra Tewari25 that once petition is admitted, it cannot be dismissed on ground of alternative remedy. It is no doubt correct that in headnote of All India Reporter (p. 331), it is stated that petition cannot be rejected on ground of availability of alternative remedy of filing appeal . But it has not been so held in actual decision of Court. relevant para 2 of decision reads thus: (Suresh Chandra Tewari case, AIR p. 331) 2. At time of hearing of this petition threshold question, as to its maintainability was raised on ground that impugned order was appealable one and, therefore, before approaching this Court petitioner should have approached appellate authority. Though there is much substance in above contention, we do not feel inclined to reject this petition on ground of alternative remedy having regard to fact that petition has been entertained and interim order passed. (emphasis supplied) Even otherwise, learned Judge was not right in law. True it is that issuance of rule nisi or passing of interim orders is relevant consideration for not dismissing petition if it appears to High Court that matter could be decided by writ court. It has been so held even by this Court in several cases that even if alternative remedy is available, it cannot be held that writ petition is not maintainable. In our judgment, however, it cannot be laid down as proposition of law that once petition is admitted, it could never be dismissed on ground of alternative remedy. If such bald contention is upheld, even this Court cannot order dismissal of writ petition which ought not to have been entertained by High Court under Article 226 of Constitution in view of availability of alternative and equally efficacious remedy to aggrieved party, once High Court has entertained writ petition albeit wrongly and granted relief to petitioner. 25 AIR 1992 All 331 (Suresh Chandra Tewari vs. District Supply Officer) Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 28 17. We do not, therefore, find any error in approach of and conclusion arrived at by High Court. It is relevant to mention that concessions given on behalf of Revenue as recorded in directions issued by High Court also take care of matters of prejudice, if any. Consequently, appellant, as matter of fact, will have fuller, adequate and efficacious remedy by way of appeal before appellate authority. 18. Certain issues raised during course of hearing touching upon aspects whether appellant is liable under Section 115QA of Act or whether transaction of buy back of shares in present matter would come within statutory contours of said Section 115QA or not, are issues which will be gone into at appropriate stages by concerned authorities; and as such we have refrained from dealing with those issues. 19. In circumstances we find that judgment and order under appeal does not call for any interference. This appeal is, therefore, dismissed. No costs. Civil Appeal No. 8945 of 2019 @ SLP(C) No.20728 of 2019 Genpact India Private Limited v. Deputy Commissioner of Income Tax & Anr. 29 20. Needless to say that appeal preferred by appellant on 30.08.2019 shall now be proceeded with in accordance with law. .J. (Uday Umesh Lalit) .J. (Indira Banerjee) New Delhi; November 22, 2019. Genpact India Private Limited v. Deputy Commissioner of Income-tax & Anr