Within eight months of challenging the National Company Law Tribunal’s (NCLT’s) order giving a green signal to Reliance Jio Infocomm’s proposed demerger, the income-tax (I-T) department is learnt to have found merit in the appellate tribunal’s December ruling, which dismissed the I-T petition.
The tax department shared its opinion and the rationale in a communique to the law ministry 10 days ago, where it sought the ministry’s legal opinion on the matter to decide further course of action, said an official privy to the development.
The National Company Law Appellate Tribunal (NCLAT) had dismissed the I-T department’s petition objecting to the proposed demerger of Jio’s tower and fibre optic network assets into two infrastructure trusts.
According to sources, the department is of the view that the NCLAT order, which had cited multiple verdicts by the Supreme Court, including the Vodafone-Essar tax avoidance case, needs to be taken into consideration. “Some of the instances quoted in the appellate order apply to the Jio case as well. So an appeal against the existing verdict may not stand legal scrutiny in the apex court,” said a tax official.
The final decision on whether to challenge the appellate tribunal order in the Supreme Court would, however, depend on the law ministry’s response, which is expected in two weeks, said an official.