INCOME TAX ACT, 1961

Section 115QA

Tax on distributed income to shareholders - Availability of appellate remedy against order passed under section 115QA - -

Assessee by way of writ petition filed before High Court challenged order passed by AO under section 115QA. High Court refused to entertain writ petition because of availability of adequate appellate remedy.Assessee challenged this by way of civil appeal filed before Supreme Court contending that section 115QA order could not possibly be equated with assessment order passed under section 143(3) only makes an assessment of the 'total income' and in relation to order passed under section 115QA no right of appeal would be available under provisions of the ACT and as such the premise on which High Court proceeded was wrong. Revenue submitted that any order determining liability to pay tax under section 115QA would be appealable and any other view would entail tremendous prejudice to concerned assessees.Held: If submission of assessee was accepted and concerned expression as stated in section 246(1)(a) or in section 246A(1)(a) had to be considered as relatable to liability of an assessee to be assessed under section 143(3) as contended, there would be no appellate remedy in case of any determination under section 115QA. The 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 was accepted, every time dispute would be required to be 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 matter considered on factual facets of the matter but would also stand deprived of regular channels of challenges available to it under hierarchy of fora available under the Act. Appeal would be maintainable against determination of liability under section 115QA and High Court was justified in refusing to entertain writ petition because of availability of adequate appellate remedy.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2014-15

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