Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos.45154524 OF 2019
(Arising out of S.L.P.(C) Nos.1405314062 of 2017)
Ryatar Sahakari Sakkarre Karkhane
Niyamit ….Appellant(s)
VERSUS
Asst. Commissioner of Income Tax
C1 & Ors. ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. These appeals are filed against the final
judgment and order dated 26.02.2016 passed by
Signature Not Verified
the High Court of Karnataka, Circuit Bench at
Digitally signed by
ASHOK RAJ SINGH
Date: 2019.05.01
16:39:16 IST
Reason:
Dharwad in ITA Nos.100111100120 of 2015
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whereby the High Court dismissed the ITAs filed by
the appellant(assessee) herein.
3. These appeals are filed by the assessee against
the order passed by the High Court by which a
bunch of appeals, some filed by the assessee and
some filed by the Commissioner of Income Tax
(Revenue) under Section 260A of the Income Tax
Act, 1961(hereinafter referred to as “the Act”) were
disposed of.
4. So far as the appeals filed by the assessee were
concerned, they were dismissed and so far as the
appeals filed by the Commissioner of Income Tax
were concerned, they were allowed. The assessee
has felt aggrieved and has filed these appeals by
way of special leave in this Court.
5. We do not consider it necessary to set out the
facts of the case in detail in the light of the order
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that we are passing for the disposal of these
appeals.
6. Heard Ms. Anitha Shenai, learned senior
counsel for the appellant(assessee) and Mr. K.
Radhakrishnan, learned senior counsel for the
respondents.
7. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow these appeals, set aside the
impugned order and remand the case to the High
Court with a request to decide the appeals afresh on
merits in accordance with law.
8. The need to remand these appeals is called for
because from the perusal of the order, we find that
in Para 4, the High Court observed, " Assessee has
raised the following questions of law in its appeals ”
and then set out four questions. Likewise, in Para 5,
the High Court observed, " Revenue has raised the
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following questions of law in its appeals ” and then
set out three questions.
9. It is not in dispute that the High Court did
not frame any question as required under Section
260A (3) of the Act.
10. This Court recently examined this question in
Civil Appeal No.3968 of 2019 arising out of S.L.P.(c)
No.29524 of 2017
(PR. Commissioner of Income
Tax Central2 vs. M/s A.A. Estate Pvt. Ltd.)
decided on 16.04.2019. Paras 21 to 26 and 28 are
apposite which read as under:
“21. As is clear from reading of Para 2, the
two questions set out in Para 2 were not the
questions framed by the High Court as was
required to be framed under Section 260A(3)
of the Act for hearing the appeal but were the
questions urged by the appellant.
22. In our view, there lies a distinction
between the questions proposed by the
appellant for admission of the appeal and the
questions framed by the Court.
23. The questions, which are proposed by
the appellant, fall under Section 260A (2) (c)
of the Act whereas the questions framed by
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the High Court fall under Section 260A (3) of
the Act. The appeal is heard on merits only
on the questions framed by the High Court
under subsection (3) of Section 260A of the
Act as provided under Section 260A (4) of
the Act. In other words, the appeal is heard
only on the questions framed by the Court.
24. Third, if the High Court was of the view
that the appeal did not involve any
substantial question of law, it should have
recorded a categorical finding to that effect
saying that the questions proposed by the
appellant either do not arise in the case
or/and are not substantial questions of law so
as to attract the rigor of Section 260A of the
Act for its admission and accordingly should
have dismissed the appeal in limine .
25. It was, however, not done and instead
the High Court without admitting the appeal
and framing any question of law issued notice
of appeal to the respondentassessee, heard
both the parties on the questions urged by
the appellant and dismissed it. In our view,
the respondent had a right to argue “at the
time of hearing” of the appeal that the
questions framed were not involved in the
appeal and this the respondent could urge by
taking recourse to sub section (5) of Section
260A of the Act. But this stage in this case
did not arise because as mentioned above,
the High Court neither admitted the appeal
nor framed any question as required under
subsection (3) of Section 260A of the Act.
The expression “such question” referred to in
sub section (5) of Section 260A of the Act
means the questions which are framed by the
High Court under subsection (3) of Section
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260A at the time of admission of the appeal
and not the one proposed in Section 260A
(2) (c) of the Act by the appellant.
26. We are, therefore, of the view that the
High Court did not decide the appeal in
conformity with the mandatory procedure
prescribed in Section 260A of the Act.
28. In the light of the foregoing discussion,
we consider it just and proper to remand the
case to the High Court for deciding the
appeal afresh to answer the questions framed
above on merits in accordance with law.”
11. The facts of the case at hand and the one
involved in M/s A.A. Estate Pvt. Ltd. quoted above
are identical and, therefore, keeping in view the law
laid down by this Court in
M/s A.A. Estate Pvt.
Ltd. (supra), these appeals have to be allowed and
the case needs to be remanded to the High Court for
hearing afresh on merits.
12. In view of the foregoing discussion, the appeals
are allowed. The impugned order is set aside. The
appeals are remanded to the High Court for hearing
afresh only after framing appropriate substantial
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question(s) of law as required under Section 260
A(3) of the Act.
13. Having formed an opinion to remand the case
to the High Court, we have not expressed any
opinion on the merits of the issues involved in these
appeals. The High Court will, therefore, decide the
appeals strictly in accordance with law,
uninfluenced by any observations made in the
impugned order and in this order.
.………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[DINESH MAHESHWARI]
New Delhi;
May 01, 2019
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