Bombay High Court
Principal Commissioner Of Income Tax 4 ... vs Skf India Limited on 16 March, 2026
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2026:BHC-OS:6922-DB
5.wpl.31106.25.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 31106 OF 2025
Principal Commissioner of Income Tax-4,
Mumbai .. Petitioner
Versus
SKF India Ltd .. Respondent
Mr.Anil Singh, ASG, with Mr. Subir Kumar, Niyanta Trivedi,
Diksha Pandey, Adarsh Vyas, Advocates for the Petitioner.
Mr. Dharan Ghandi, with Ms. Aanchal Vyas, Advocates for the
Respondent.
CORAM: B. P. COLABAWALLA &
Digitally signed
ANJALI
TUSHAR
by ANJALI
TUSHAR
ASWALE
Date:
FIRDOSH P. POONIWALLA, JJ.
ASWALE 2026.03.23 15:25:13 +0530 DATE: MARCH 16, 2026 P. C.
1. By this Petition filed under Article 226 of the Constitution of India, the Petitioner (Revenue) challenges the order dated 03.10.2024 passed by the Income Tax Appellate Tribunal, Special Bench, Mumbai (" ITAT Special Bench") in ITA No. 7544/Mum/2011 for the Assessment Year 2000-01.
2. Brief facts of the case can be summarized thus: Page 1 of 7
MARCH 16, 2026 Aswale ::: Uploaded on - 23/03/2026 ::: Downloaded on - 27/03/2026 22:55:29 :::
5.wpl.31106.25.doc
a) The Respondent-Assessee filed its return of income for the Assessment Year 2000-01 offering capital gains of Rs. 2,62,63,582/- arising from the sale of residential flats. The Respondent computed the gains as short-term capital gains ("STCG") in accordance with Section 50 of the Income Tax Act, 1961 ("the I. T. Act") but applied the concessional tax rate of 20% applicable to long-term capital gains ("LTCG") under Section 112 of the I. T. Act, contending that the assets were held for more than 36 months.
b) The Assessing Officer rejected this claim, holding that once the capital gain is deemed as STCG under section 50, the normal tax rate applicable to STCG (30%) must apply. This view was confirmed by the Commissioner of Income Tax (Appeals).
c) On appeal to the Tribunal, a reference was made to the Special Bench to decide the specific question of law: "Whether the capital gains under Section 50 of the I. T. Act arising out of sale of long-term capital asset is chargeable at the rate applicable to short term capital gains or rates applicable to long term capital gains under Section 112 of the I.T. Act?"
Page 2 of 7
MARCH 16, 2026 Aswale ::: Uploaded on - 23/03/2026 ::: Downloaded on - 27/03/2026 22:55:29 :::
5.wpl.31106.25.doc
d) By the impugned order dated 03.10.2024, the ITAT Special Bench answered the reference in favour of the Assessee, holding that the legal fiction under Section 50 is restricted to the computation of capital gains and does not convert a long-term capital asset into a short-term capital asset for the purpose of the tax rate under Section 112 of the I. T. Act.
3. At the outset, the learned Counsel for the Respondent, raised a preliminary objection regarding the maintainability of the Petition. He submitted that the Petitioner has an efficacious alternate remedy available under Section 260A of the I. T. Act. He pointed out that subsequent to the impugned Special Bench order, the Regular Bench of the ITAT has passed the final order dated 25.02.2025 disposing of the appeal. Therefore, the appropriate remedy for the Revenue is to file an appeal before this Court against the final order of the Tribunal, wherein the question of law decided by the Special Bench can be raised. In the alternative, he submitted that the order of the Special Bench which decided this issue, can be challenged in an appeal before this Court under section 260A of the I. T. Act as it is an order in appeal. He submitted that even otherwise, the tax effect involved in the case of the Respondent is less than the threshold limit as specified by the Central Page 3 of 7 MARCH 16, 2026 Aswale ::: Uploaded on - 23/03/2026 ::: Downloaded on - 27/03/2026 22:55:29 :::
5.wpl.31106.25.doc Board of Direct Taxes for filing of appeal and therefore, neither an appeal can be filed nor a writ can be maintained.
4. Per contra, the learned Counsel for the Petitioner, argued that the Writ jurisdiction can be exercised in the present case despite the existence of an alternate remedy. As against the argument of the Respondent that since the Petitioner has not challenged the Final Order dated 25.02.2025, the Writ Petition is not maintainable, it is the submission of the Petitioner that the said argument is not sustainable in law as the Hon'ble Special Judgment dated 03.10.2024 specifically decided the issue related to rate of tax to be paid under Section 112 r/w computation of capital gains under Section 50 of the I. T. Act, and the regular bench decided the other issues in ITA No.7544/Mum/2011. This is clear from reading of the operative portion at paragrapph 45 and paragraph 11.2 and 12 of Hon'ble Special Bench Judgment dated 03.10.2024. Hence, the Petitioner was not required to challenge the Final Order dated 25.02.2025. He contended that the impugned order passed by the Special Bench is legally incorrect as it renders the non-obstante clause in Section 50 of the I. T. Act meaningless. In such a scenario, he submitted, that this Court is not denuded of its powers to entertain a Writ Petition.
Page 4 of 7
MARCH 16, 2026 Aswale ::: Uploaded on - 23/03/2026 ::: Downloaded on - 27/03/2026 22:55:29 :::
5.wpl.31106.25.doc
5. We have heard the learned Counsel for the parties and perused the record. The primary challenge is to the interpretation of Section 50 vis-à- vis Section 112 of the I. T. Act adopted by the ITAT Special Bench.
6. It is a settled principle of law that the High Court will not ordinarily entertain a Writ Petition under Article 226 of the Constitution when an efficacious statutory alternate remedy is available, unless the case falls within the well-recognized exceptions. The Hon'ble Supreme Court in the case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai & Ors. [(1998) 8 SCC 1], has laid down that the jurisdiction of the High Court in entertaining a Writ Petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, where the Writ Petition has been filed for the enforcement of any of the Fundamental Rights, or where there was been a violation of the principles of natural justice, or where the order or proceedings are wholly without jurisdiction, or the vires of an Act is challenged. In the peculiar facts of the case, we do not agree with the submission of the Respondent that Petition is not maintainable as final Order dated 25.02.2025 has not been challenged. We are of the view that Regular Bench by its order dated 25.02.2025 decided the other issues in ITA No.7544/Mum/2011 and not the issue decided by the Page 5 of 7 MARCH 16, 2026 Aswale ::: Uploaded on - 23/03/2026 ::: Downloaded on - 27/03/2026 22:55:29 :::
5.wpl.31106.25.doc Hon'ble Special Bench Judgment vide its order dated 03.10.2024 in ITA No.7544/Mum/2011. Hence, the argument of the Respondent regarding maintainability of writ on this legal issue is not sustainable.
7. Having said that, we find that the Petitioner in the present Writ Petition has challenged the legal interpretation rendered by the Hon'ble Special Bench to Section 50 and 112 of the I. T. Act, though the said judgment can also be assailed under Section 260A of the I. T. Act. In the present case, the Petitioner has failed to demonstrate the existence of any such extraordinary circumstances. The grievance of the Petitioner is that the interpretation placed by the ITAT Special Bench on the provisions of the I. T. Act is incorrect. An error of law or interpretation by the Tribunal does not necessarily imply a lack of jurisdiction or a violation of natural justice. Such errors, if any, can be effectively agitated in an appeal under Section 260A of the I. T. Act. Further, such an appeal would be before this Court only. Consequently, we are not inclined to entertain this Petition.
8. The Writ Petition is, accordingly, dismissed. There shall be no order as to costs.
9. We make it clear that we have not examined the merits of the Page 6 of 7 MARCH 16, 2026 Aswale ::: Uploaded on - 23/03/2026 ::: Downloaded on - 27/03/2026 22:55:29 :::
5.wpl.31106.25.doc controversy or the correctness of the impugned order passed by the ITAT Special Bench. All contentions on the correctness of the view taken in the said order of the ITAT Special Bench are kept open to be agitated in appropriate proceedings before the appropriate forum in accordance with law.
10. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order. [FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.] Page 7 of 7 MARCH 16, 2026 Aswale ::: Uploaded on - 23/03/2026 ::: Downloaded on - 27/03/2026 22:55:29 :::