"Software Development Company Appeals Against High Court Judgment Regarding Share Buy-Back Tax Discrepancies, Alleged Non-payment on Overseas Remittances Questioned."

This appeal pertains to a case where the appellant, a software development company, purchased its own shares under a Scheme of Arrangement and Compromise, approved by the High Court as per Sections 391 (of Income Tax Act, 1961) to 393 of the Companies Act, 1956. The appellant bought back a total of 94,00,534 shares from four shareholders for a total sum of Rs.19,080 crores.

Later, the appellant received a letter from the Deputy Commissioner of Income Tax regarding non-payment of tax on remittances made to non-residents in Financial Years 2015-16 and 2016-17. The letter detailed the remittances made to each shareholder, noting that tax had not been deducted or paid for some remittances and was paid at a rate of 10% for others. The letter requested the appellant to provide specific information including dates and amounts of remittances, the nature and purpose of these remittances, details of any agreements or schemes related to the remittances, details of taxes deducted or paid, and the reasons for any deviations from statutory tax requirements.

The appeal stems from the judgment passed in Writ Appeal No.2063 of 2019 by the High Court, and the appellant seeks to challenge this judgment.

The appellant provided the required details on 01.12.2017 and 05.12.2017, followed by meetings with Department officials. On 22.03.2018, the Department issued a communication stating that the appellant had not remitted any tax under Section 115-O (of Income Tax Act, 1961), despite the required 15% tax to be remitted within 14 days of payment to the shareholders. The Department argued that, according to Sections 115-QA, 115-O, or 2(22) of the Income Tax Act, the company's "arrangement and compromise" scheme was subject to these provisions.

After considering the facts, the Department concluded that the payment made to shareholders under the "arrangement and compromise" scheme constituted a dividend under Section 2(22)(d) (of Income Tax Act, 1961)/2(22)(a) of the Act. Therefore, the company had to remit the taxes under Section 115-O (of Income Tax Act, 1961). If it failed to do so, the company would be considered an "assessee in default" under Section 115-Q (of Income Tax Act, 1961). Consequently, the Department attached the bank accounts of the appellant after it received this communication on 26.03.2018.

Meanwhile, on 20.03.2018, while meetings between the officials were ongoing, the appellant sought a ruling from the Authority for Advance Ruling (AAR) under Section 245Q (of Income Tax Act, 1961) on its liability to pay tax on buy-back of its shares under Section 115QA (of Income Tax Act, 1961) or Section 115-O (of Income Tax Act, 1961) or any other provision of the Act.

The appellant then challenged the Department's communication in the High Court, arguing that the issue couldn't have been considered while it was still pending before the AAR due to the bar provided under Section 245RR (of Income Tax Act, 1961). The appellant argued that it had never been informed about its liability under Section 115-O (of Income Tax Act, 1961), and that it had only been asked to provide information, which it had complied with.

The appellant challenged a communication from the Department of Revenue dated 22.03.2018, stating that they had not paid tax under section 115-O (of Income Tax Act, 1961) on dividends distributed to its shareholders. The appellant argued that their "arrangement and compromise" scheme, approved by the court and in accordance with sections 391-393 of the Companies Act, made them exempt from certain provisions of the Income Tax Act. However, the Department asserted that the appellant's scheme would be considered a 'buy-back' of shares and subject to tax under section 115-QA (of Income Tax Act, 1961).

The appellant's bank accounts were subsequently attached by the Department. Amidst these events, the appellant submitted an application before the Authority for Advance Ruling (AAR) on 20.03.2018 seeking clarity on their tax liability for the buy-back of its shares. They filed a Writ Petition No.7354 of 2018 challenging the department's communication and arguing that the issue was under the purview of the AAR and could not have been considered separately.

On 03.04.2018, a Single Judge of the High Court provided interim directions for the appellant to pay 15% of the demanded tax and to furnish a Bank Guarantee or security for the remaining tax to be paid, while dismissing the Writ Petition as not maintainable and redirecting the appellant to the Appellate Authority under the Act.

The appellant then filed Writ Appeal No.2063 of 2019 challenging the Single Judge's decision. The Division Bench confirmed the order was final and should be considered by the Appellate Authority. Meanwhile, the court ordered the appellant to maintain the deposited amount, pending further consideration. The appellant agreed to furnish any necessary security at the disposal of the Special Leave Petition if required.

The appellant's Senior Advocate, Mr. Gopal Subramanium, argued that the transaction in question didn't fall under Section 115-O (of Income Tax Act, 1961), and the appellant wasn't properly informed about the proposed determination under the same section. He stated that the communication dated 22.03.2018 was merely an intimation of the Department's intended action, not a formal determination of the appellant's liability.

Mr. Zoheb Hossain, representing the Department, countered these claims, arguing that the issue indeed fell under Section 115-O (of Income Tax Act, 1961). He referred to Section 115-Q (of Income Tax Act, 1961), stating that if a company hadn't paid tax on distributed profits per Section 115-O (of Income Tax Act, 1961), it would be considered "an assessee in default." Consequently, he maintained the Department was justified in issuing the 22.03.2018 communication and subsequently attaching the appellant's accounts.

The court heard lengthy arguments regarding whether the 22.03.2018 communication constituted a determination of liability. Eventually, Mr. Hossain agreed to treat the communication as a show cause notice and permit the Department to conclude the issue in due time, on the condition that the interim order by the High Court on 03.04.2018 was maintained.

The appellant agreed to withdraw their proceedings before the AAR, and the Department agreed to treat the 22.03.2018 communication as a show cause notice. The appellant was given ten days to respond to the show cause notice, and the case will be decided on its merits by the authority within two months.

The interim order passed by the High Court and affirmed by the Supreme Court will remain in effect during this period, and the money deposited towards tax payment and in the form of Fixed Deposit Receipts will be subject to the Authority's decision or Appellate Authority's directions.

The Supreme Court clarified that it had only stated the case's facts to narrate the events and explain the chronology. The merits of the case will be decided independently by the concerned authorities, uninfluenced by any observations made by the High Court or Supreme Court.

Finally, the appeal was disposed of as per these terms, and the judgment under appeal was accordingly modified.

1. Leave granted.

2. This appeal arises out of the final judgment and order dated

06.09.20191 passed by the High Court in Writ Appeal No.2063 of 2019.

3. The appellant is engaged in the business of development of

computer software and related services. In the Financial Year 2016-17, the

appellant approached the High Court with a Scheme of Arrangement and

Compromise under Sections 391 (of Income Tax Act, 1961) to 393 of the Companies Act, 1956 to

buy-back its shares. The High Court sanctioned the Scheme on 18.04.2016

in Company Petition No.102 of 2016, pursuant to which the appellant

purchased 94,00,534 shares at a price of Rs.20,297/- per share from its four

shareholders and made a total remittance of Rs.19,080 crores

approximately. The details in that behalf were:-

Shareholder Shares Purchased (No. of Shares)

Consideration (Amount in Rs.)

Tax deducted at Source (Amount in Rs.)

Cognizant Technology Solutions Corporation

(“CTS USA”)

37,00,747 7511,40,61,859 810,73,37,402

MarketRx Inc (USA) 2,38,521 484,12,60,737 52,33,24,388

Cognizant (Mauritius) Limited (Mauritius)

53,01,778 10761,03,91,036 0

(Treaty benefit claimed)

CSS Investments LLC,

Delaware (USA)

1,59,478 323,69,24,966 34,95,01,528

Total 94,00,534 19080,26,38,598 898,01,63,318

According to the appellant, this buy-back of shares was effected in

May 2016.

4. Thereafter, the appellant made statutory filing under Form 15 CA

(under Rule 37BB (of Income Tax Rules, 1962)) after obtaining requisite

certificate from a Chartered Accountant in Form 15CB furnishing details of

remittances made to non-residents.

5. On 21.11.2017 a letter was received by the appellant from the

Deputy Commissioner of Income Tax, Large Taxpayer Unit-1, Chennai in

connection with non-payment of tax on the remittances made to the non-

residents, in Financial Years 2015-16 and 2016-17. The letter stated:-

“....On verification of 15CA data available with the

department, it is noticed that your company has made the

following remittances to non-residents during the financial

years 2015-16 and 2016-17.

Date of Remittance

Name of the non-resident

company receiving the

remittance

Amount remitted (Rs.)

Tax made on remittance (Rs.)

17.02.2016 Cognizant (Mauritius) Ltd.

335,36,38,361 Nil

19.05.2016 Cognizant (Mauritius) Ltd.

10761,03,91,036 Nil

19.05.2016 Cognizant Technology

Solutions Corporation,USA

7511,40,61,859 810,73,37,402

19.05.2016 Market Rx Luc, USA 484,12,60,737 52,33,24,388

19.05.2016 CSS investment LLC,USA

323,69,24,966 34,95,01,528

Total 19415,62,76,959 898,01,63,318

The data available with the department shows that you have

not deducted/paid any tax on the remittances made to M/s

Cognizant (Mauritius) Ltd. on 17.02.2016 and 19.05.2016

whereas in the case of remittances to the concerns in USA,

you have only deducted/paid tax @ 10% (plus surcharge &

cess).

In this regard, I request you to kindly furnish the following

information:

a) The dates and amounts of remittances to the non-residents

during the FYs. 2015-16 & 2016-17, along with their

residential status.

b) The nature and purpose of the said remittances. Copies of

the documents submitted to the RBI for obtaining the

permission and remitting the amounts.

c) Whether the above remittances are in accordance with any

agreement, scheme etc.? If so, please furnish the copies of

the same.

d) Dates and amounts of taxes deducted/paid into govt.

account, along with evidences, and the sections under

which the said tax was deducted and/or claimed exempt, as

the case may be.

e) The rate(s) at which the above tax is deducted/paid into the

govt. account, in each case; and reasons for deviation from

the statutory requirement of tax, if any, or non-

deduction/non-payment, as the case may be.”

6. The requisite details were furnished by the appellant vide letters

dated 01.12.2017 and 05.12.2017 whereafter meetings were held between

the officials of the appellant and the officers of the Department. Later, a

communication was addressed by the Department to the appellant on

22.03.2018. After referring to the remittances made by the appellant to its

four shareholders, it was stated:-

“2. The company has not remitted any tax u/s. 115 (of Income Tax Act, 1961)-O of the

Act till date, even though the tax @ 15% u/s. 115 (of Income Tax Act, 1961)-O is to be

remitted into the central Govt. Account within 14 days from

the date of payment to the shareholders.

3. The assessee company was under the impression that

since its scheme of “arrangement and compromise” between

the shareholders and the company, was in accordance with

sec.391 (of Income Tax Act, 1961) to 393 of the Companies Act, and approved by the

Court, the provisions of section 115-QA (of Income Tax Act, 1961), 115-O or 2(22) of

Income Tax Act are not applicable to its case. During the

personal discussion between the company and the

AO/JCIT/CIT (LTU), it was brought to the notice of the

Company that:

Provisions of sections 115-QA of the IT Act, which

were introduced w.e.f. 01.06.2013, defines the ‘buy-

back’, as the one done in accordance with sec.77A (of Income Tax Act, 1961) of

the Companies Act (valid upto 31.05.2016). W.e.f.

01.06.2016, any buy-back of own shares will attract

115-QA.

Provisions of sec.2(22)(d) (of Income Tax Act, 1961), clearly postulates that any

distribution on reduction of capital, to the extent of

accumulated profits will amount to dividends. The

only exception to this is the buy-back u/s. 77A (of Income Tax Act, 1961) of the

Companies Act. Provisions of sec.2(22)(d) (of Income Tax Act, 1961) are:

S.2(22)(d): any distribution to its shareholders by a

company on the reduction of its capital, to

the extent to which the company possesses

accumulated profits which arose after the

end of the previous year ending next before

the 1st day of April, 1933, whether such

accumulated profits have been capitalised

or not:

Even otherwise, provisions of sec. 2(22)(a) (of Income Tax Act, 1961),

which stipulate that any distribution to the shareholders

is a dividend, if it is contended that it was not a case of

reduction of capital. Provisions of sec.2(22)(a) (of Income Tax Act, 1961) are:

S.2(22)(a): any distribution by a company of

accumulated profits whether capitalised

or not, if such distribution entails the

release by the company to its

shareholders of all or any part of the

assets of the company;

Once, the provisions of sec.2(22)(d) (of Income Tax Act, 1961) or 2(22)(a) are

applicable, the distributor is required to pay tax

u/s.115 (of Income Tax Act, 1961)-O of the Act.

In the present case, the assessee’s purchase of its own

shares, which is not in accordance with sec.77A (of Income Tax Act, 1961) of the

Companies Act, will amount to dividends within the

meaning of sec.2(22)(d) (of Income Tax Act, 1961) or 2(22)(a) of the Act, and

consequently, liable for tax u/s. 115 (of Income Tax Act, 1961)-O of the Act in the

hands of the assessee company.”

After considering factual aspects it was stated :-

“11. This clearly shows that, to the extent of face value

(issued price), the paid-up share capital will be utilized and

the balance will be paid from the reserves, which are

nothing but accumulated profits in the present case. Here

the payment from the paid-up shares capital is nothing but

reduction of capital and the latter (i.e. payment from the

reserves being accumulated profits) is distribution of

profits.

12. When any company reduces the ‘share capital’ as per

the provisions of the Companies Act, by way of reducing

the face value of shares or by way of paying off part of the

share capital, it amounts to extinguishment of the rights of

the shareholder to the extent of reduction of share capital.

Therefore, it is regarded as transfer under section 2(47) (of Income Tax Act, 1961) of

the IT Act and would be chargeable to tax.”

Finally, it was concluded:-

“18. Thus, the payments made to the shareholders, under

purchase of shares through the scheme of “arrangements

and compromise”, is a dividend within the meaning of

section 2(22)(d) (of Income Tax Act, 1961)/2(22)(a) of the Act, requiring to remit the

taxes in to the government account u/s. 115 (of Income Tax Act, 1961)-O of the Act.

Further, since the company has failed to remit the taxes

within the stipulated period, the company is ‘deemed to be

an assessee in default’, u/s. 115 (of Income Tax Act, 1961)-Q of the Act. Therefore the

assessee company is required to remit the taxes (calculated

@ 15% of the total payments of Rs.19415,62,77,269/- to

the shareholders, and surcharge etc as per the Act) along

with the interest payable u/s. 115 (of Income Tax Act, 1961)-P of the Act, immediately,

failing which the department will proceed with the

collection and recovery of the taxes, including coercive

steps, as per the provisions of the Act.”

7. Said communication dated 22.03.2018 was received by the

appellant on or about 26.03.2018 and soon thereafter the bank accounts of

the appellant were attached by the Department.

8. It must be stated here that while the meetings between the officials

of the appellant and the officers of the Department were going on, an

application was preferred by the appellant on 20.03.2018 before the

Authority for Advance Ruling (AAR) under Section 245Q (of Income Tax Act, 1961)3

seeking a ruling on the issue whether the appellant was liable to pay tax on

buy-back of its shares under Section 115QA (of Income Tax Act, 1961) or Section 115-O (of Income Tax Act, 1961) or any other

provision of the Act.

9. The appellant challenged the communication dated 22.03.2018 by

filing Writ Petition No.7354 of 2018 in the High Court submitting inter

alia that while the issue was pending before the AAR under Section 245Q (of Income Tax Act, 1961)

of the Act, in view of the bar provided under Section 245RR (of Income Tax Act, 1961), the

matter could not have been considered. It was also submitted that the

3 The Income Tax Act, 1961. appellant was never put to notice whether it would be liable under Section 115-O (of Income Tax Act, 1961). It was further submitted that all the while the Department was only soliciting information which the appellant had readily furnished and at no stage the appellant was put to notice that its liability would be determined in any manner.

10. The Writ Petition came up before a Single Judge of the High Court

on 03.04.2018 when following interim directions were issued:-

“11. In my considered view the impugned proceedings has

crystallized in the form of a demand for payment of tax,

and if the petitioner has to be granted an interim protection

till the writ petition is finally heard, the same has to be

conditional and cannot be unconditional. Assuming

without admitting the petitioner had to avail an appellate

remedy under the Act and prays for appropriate interim

orders before an appellate authority, then the appellate

authority is entitled to grant an order of stay, which is

invariably conditional on account of guidelines issued by

the Central Board of Direct Taxes (CBDT) with a view to

maintain uniformity in the matter of grant of interim orders.

As per the latest guidelines prescribed by CBDT, it has

recommended that 20% of the demand, which has been

made shall be directed to be remitted by the assessee for

grant of stay of the remaining demand. Though this cannot

be a universal rule, invariable in most cases, the authorities

have adopted the 20% formula. However, in certain cases,

this Court has interfered with such orders and reduced the

amounts payable by the assessee and in certain other cases,

where no stay has been granted by the authority and the

assessee has approached the Court for grant of interim stay,

the Court has imposed condition by directing payment of

more than 20% of the demand. Therefore, the facts of each

case have to be considered while granting interim order

bearing in mind the interest of the assessee as well as

safeguarding the interest of the Revenue.

12. Thus, considering the facts and circumstances of the

case, there will be an order of interim stay of the impugned

proceedings subject to the condition that the petitioner pays

15% of the tax demanded and furnishes a Bank Guarantee

or security by way of Fixed Deposits for the remaining

taxes (only), to be paid. For the purpose of complying with

the above condition, the attachment of the Bank account in

JP Morgan Chase Bank N.A., J.P. Morgan Tower, 8th Floor,

Off C.S.T Road, Kalina, Santacruz East, Mumbai – 400

098 shall stand lifted forthwith. However, the attachment

in respect of other Bank accounts viz.,

(a) State Bank of India, CAG Branch, Chennai.

(b) Deutsche Bank, Ground Floor,

Door No.4 & 4A,

Western Tower,

Sunny Side, Shafi Mohammed Road,

Thousand Lights, Chennai – 600 006.

(c) Corporation Bank, Corporate Banking Branch,

38 & 39 Whites Road, Chennai-600 014.

(d) City Bank N.A., No.163, Anna Salai,

Chennai-600 002.

(e) HDFC Bank, No.115, Dr. Radhakrishnan Salai,9th Floor, Mylapore, Chennai-600 004,shall continue till the compliance of the above direction.

Similarly, the attachment of the nine Bank deposits viz., (1)

HDFC Limited, (ii) HDFC Limited, (iii) HDFC Limited,

(iv) HDFC Limited, (v) HDFC Limited, (vi) HDFC

Limited, (vii) Bajaj Finance Limited, (viii) Bajaj Finance

Limited, (ix) Bajaj Finance Limited shall also continue

subject to the lien being created for the remaining amount

of taxes. The remittance of 15% of the tax demanded shall

be retained in a separate account and shall abide by the

orders to be passed in the writ petition.”

11. The Single Judge by his decision dated 25.06.2019 dismissed the

Writ Petition as not being maintainable and relegated the appellant to avail

the remedy before the Appellate Authority under the Act. However, during

the course of his decision, the Single Judge concluded that there was no

need for issuance of any notice before making a demand under Section

115-O of the Act and the notice issued on 21.11.2017 calling for details

whereafter meetings were convened, was quite adequate. He rejected the

submission that there would be a bar in terms of Section 245RR (of Income Tax Act, 1961).

The Single Judge did not find any merit in the contention that the shares

purchased pursuant to the order of the Company Court could not be treated

as dividend. While relegating the appellant to avail the remedy before the

Appellate Authority it was observed:-

“33. .. the Appellate Authority shall take into account

the amount deposited in pursuance of the order referred

supra, while entertaining the appeal. With regard to Fixed

Deposits, the respondent shall maintain status-quo as on

date for a period of two weeks. ... ...”

12. The appellant, being aggrieved, challenged the aforesaid view by

filing Writ Appeal No.2063 of 2019. While discussing the issues that came

up for consideration, the Division Bench observed that the Single Judge

after having found the Writ Petition to be not maintainable, ought not to

have gone into merits. As regards the nature of the communication dated

22.03.2018 and maintainability of an appeal challenging the same, it was

observed:-

“11. The learned Senior Counsel appearing for the

appellant would submit that it is not known as to whether

the impugned order dated 22.03.2018 is a show cause

notice or final order. Though there appears to be some

element of contradiction in the counter affidavit filed, the

said order appears to be a final one. Now it is also the

contention of the learned Additional Solicitor General that

it is only a final order. We are also of the view that the

further action taken would also indicate that the order under

challenge was a final one. If it is only a show cause notice,

then there is no need to challenge it and instead the

consequential freezing alone requires to be questioned.

The further question as to whether the order under

challenge violates the principles of natural justice or

requisite procedure contemplated under the Act is a matter

for consideration before the Appellate Authority. The

learned Single Judge has rightly observed that the appeal

can be entertained and decided on merit as the appellant has

already deposited a sum of Rs.495 crores.”

13. The view taken by the Division Bench of the High Court is

presently under appeal. On 04.10.2019, an affidavit of undertaking, filed

on behalf of the appellant was taken on record in which it was submitted:-

“In the event this Hon’ble Court is gracious to pass an

order that the fixed deposits over which a lien has been

created, pursuant to the Interim Order passed by the

Learned Single Judge (continued by the Division Bench), is

vacated as an interim measure to enable the Petitioner

Company to run its business and operations, the Petitioner

undertakes that in the event this Hon’ble Court is satisfied

that any security must be offered by the Petitioner ex debito

justitiae at the time of the disposal of the Special Leave

Petition, the Petitioner will unqualifiedly, without demur,

furnish such security/fixed deposits to the satisfaction of

the Registrar of the Hon’ble Court as this Hon’ble Court

may be so pleased to direct.”

However, by order dated 14.10.2019, this Court observed:-

“It is a matter of record that pursuant to order dated

03.04.2018 passed by the Single Judge of the High Court of

Judicature at Madras in Writ Petition No.7354 of 2018, a

sum of Rs.2806,40,15,294/- stands deposited and invested

in the form of fixed deposit receipts.”

It was then directed:-

“Pending further consideration, the amount which is

presently lying in deposit shall be maintained in the same

form.”

14. We heard Mr. Gopal Subramanium, learned Senior Advocate for the

appellant and Mr. Zoheb Hossain, learned advocate for the Department.

15. It was submitted by Mr. Subramanium, learned Senior Advocate

that the instant transaction would not come within the scope of Section

115-O of the Act. It was submitted that the appellant was never put to

notice about the proposed determination in terms of Section 115-O (of Income Tax Act, 1961) of the

Act; that the communication dated 22.03.2018 could not be said to have

determined the liability of the appellant under Section 115-O (of Income Tax Act, 1961)

and consequently the appellant could not have been relegated to the

appellate remedy as directed. It was submitted that the communication

dated 22.03.2018 could, at best be treated as an intimation of the action

proposed to be taken resort to by the Department. These submissions were

countered by Mr. Zoheb Hussain, learned Advocate. According to him, the

matter would come within the ambit of Section 115-O (of Income Tax Act, 1961). He also

relied upon Section 115-Q (of Income Tax Act, 1961) to submit that in case the assessee-

company had not paid tax on distributed profits in accordance with the

provisions of Section 115-O (of Income Tax Act, 1961), the assessee-company would be deemed to be

“an assessee in default” in respect of the amount of tax and all provisions

relating to collection and recovery of income tax would apply. As an

extension of the concept, it was submitted that the Department was justified

in issuing the communication dated 22.03.2018 followed by attachment of

the accounts of the appellant.

16. On the issue whether communication dated 22.03.2018 was in the

nature of determination of the liability, both the learned counsel were heard at considerable length, at the end of which it was agreed by Mr. Zoheb

Hossain, learned Advocate for the Department, that the communication

dated 22.03.2018 could be treated as a show cause notice and the

Department be permitted to conclude the issue within a reasonable time,

provided the interim order passed by the Single Judge of the High Court on

03.04.2018 was continued. The course suggested by the learned counsel

for the Department was acceptable to the learned Senior Counsel for the

appellant.

17. It was, therefore, suggested that the appellant may file an affidavit

of undertaking to withdraw the proceedings initiated by it before the AAR

and the Department may also file an appropriate affidavit stating that it was willing to treat the communication dated 22.03.2018 as a show cause

notice. An appropriate affidavit of undertaking to withdraw the

proceedings initiated before the AAR has since then been filed by the

appellant. An affidavit has also been filed on behalf of the Department

stating:-

“The communication dated 22.03.2018 may be treated as a

show cause notice and the assessee will be given an

opportunity of being heard and a fresh order will be passed

within two months from the date of the judgment of this

Hon’ble Court.”

18. In the peculiar facts and circumstances of the present case, while

disposing of this Appeal, we direct:-

a) The communication dated 22.03.2018 shall be treated as a show

cause notice calling upon the appellant to respond with regard to

the aspects adverted to in said communication;

b) The appellant shall be entitled to put in its reply and place such

material, on which it seeks to place reliance, within 10 days from

today;

c) The appellant shall thereafter be afforded oral hearing in the

matter;

d) The matter shall thereafter be decided on merits by the concerned

authority within two months from today;

e) Pending such consideration, as also till the period to prefer an

appeal from the decision on merits is not over, the interim order

passed by the Single Judge of the High Court on 03.04.2018 and as

affirmed by this Court vide its order dated 14.10.2019, shall

continue to be in operation; and

f) The amount of Rs.495,24,73,287/- deposited towards payment of

tax and the amount of Rs.2806,40,15,294/- which stands deposited

and invested in the form of Fixed Deposit Receipts shall be subject

to the decision to be taken by the concerned Authority on merits or

to such directions as may be issued by the Appellate Authority.

19. We have stated the facts of the present case only by way of

narration of events and explaining the chronology. We shall not be taken to

have dealt with merits or demerits of the rival contentions of the parties.

The merits of the matter shall be gone into independently by the concerned

authorities without being influenced, in any way, by any of the observations

made by the High Court and this Court.

20. The Appeal is disposed of in aforesaid terms and the judgment and

order presently under appeal shall stand modified accordingly. No costs.

[UDAY UMESH LALIT]

[INDU MALHOTRA]

[HEMANT GUPTA]

New Delhi;

March 04, 2020.