Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 2362 OF 2019
(Arising out of S.L.P.(C) No.20075 of 2017)
Commissioner of Income TaxI ….Appellant(s)
VERSUS
M/s Rashtradoot (HUF) ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is filed against the final judgment
and order dated 25.10.2016 passed by the High
Court of Judicature for Rajasthan, Bench at Jaipur
Signature Not Verified
Digitally signed by
ANITA MALHOTRA
Date: 2019.02.27
17:28:21 IST
Reason:
in D.B. Income Tax Appeal No. 43 of 2002 whereby
the Division Bench of the High Court dismissed the
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appeal filed by the appellant herein and affirmed the
order dated 24.05.2001 passed by the Income Tax
Appellate Tribunal (ITAT), Jaipur Bench, Jaipur in
I.T.S.S.A. No.29/JP/2000.
3. A few facts need mention infra for the disposal
of the appeal.
4. This appeal filed by the Revenue arises out of
the income tax proceedings initiated against the
respondent(assessee) on the basis of a search
operation which was carried out by the Income Tax
Department in assessee’s premises on 04.09.1997.
This gave rise to initiation of assessment
proceedings for the block period from 01.04.1987 to
04.09.1997 (Assessment Years 198788 to 199697
and 199798 up to 04.09.1997) against the assessee
to determine their tax liability as a result of search
operations carried in their premises. The matter,
out of the block assessment proceedings, reached to
the Income Tax Appellate Tribunal at the instance of
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the respondent against the order of the assessing
authorities.
5. The Tribunal (ITAT), however, decided the
various issues arising in the case in favour of the
respondent(assessee) by allowing the respondent's
appeal, which gave rise to filing of the appeal by the
Revenue before the High Court under Section 260A
of the Income Tax Act, 1961 (hereinafter referred to
as “the Act”).
6. The High Court by impugned judgment
dismissed the Revenue's appeal, which gave rise to
filing of this appeal by way of special leave by the
Revenue in this Court.
7. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are constrained to allow the appeal and remand the
case to the High Court for deciding the appeal
afresh on merits in accordance with law.
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8. The need to remand the case to the High Court
has arisen for the reason that on perusal of the
impugned order, we find that the High Court has set
out the facts in paragraph 2 and the submissions of
the counsel for the parties in paragraphs 3 to 9. In
paragraph 10, the High Court mentioned the names
of the counsel who argued the case and then in
paragraphs 12 and 13, the High Court states as
under :
“12. The Tribunal while considering the
judgment on 24.05.2001 did not consider the
amendments envisaged by the legislature,
therefore, under Section 260A when we are
considering substantial law, we have to
consider whether the Tribunal has committed
an error.
13. In view of the above, the issue is
answered in favour of the assessee and
against the department. The view taken by
this Court in a case of Relaxo
Foorwear(supra) will apply in the present case
and the view taken by the Tribunal is liable
to be confirmed and the same is confirmed.”
9. A perusal of the aforementioned two
concluding paragraphs would go to show that the
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High Court has neither discussed and nor assigned
any reason in support of its conclusion for the
dismissal of the appeal.
10. Indeed, the observation made in paragraph 13
that "In view of the above" does not lead us
anywhere because, as mentioned above, in the
paragraphs 1 to 12 no reasons are mentioned
except the facts and the submissions.
11. That apart, we find that the High Court
committed another error. The High Court while
deciding the appeal heard the learned counsel for
the parties, yet did not frame any substantial
question of law arising in the case.
12. Section 260A of the Act is akin to Section 100
of the Code of Civil Procedure, 1908 (hereinafter
referred to as “the Code”) with addition of sub
sections (6)(a),6(b) and (7) of Section 260A of the
Act.
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13. The High Court has jurisdiction to dismiss the
appeal filed under Section 260A of the Act on the
ground that it does not involve any substantial
question of law. Such dismissal is considered as a
dismissal of the appeal in limine , i.e., dismissal
without issuing any notice of appeal to the
respondent and without hearing the respondent.
14. The High Court has also the jurisdiction to
dismiss the appeal by answering the question(s)
framed on merits or by dismissing the appeal on the
ground that the question(s) though framed but such
question(s) does/do not arise in the appeal. The
High Court, though may not have framed any
particular question at the time of admitting the
appeal along with other question, yet it has the
jurisdiction to frame additional question at a later
stage before final hearing of the appeal by assigning
reasons as provided in proviso to Section 260A(4)
and Section 260A(5) of the Act and lastly, the High
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Court has jurisdiction to allow the appeal but this
the High Court can do only after framing the
substantial question(s) of law and hearing the
respondent by answering the question(s) framed in
appellant’s favour.
15. However, in this case, we find that the High
Court did not dismiss the appeal in limine but
dismissed it after hearing both the parties. In such
a situation, the High Court should have framed the
question(s) and answered them by assigning the
reasons accordingly one way or the other by
exercising powers under subsections (4) and (5) of
Section 260A of the Act.
16. As mentioned above, in the absence of any
discussion or/and the reasoning/ground as to why
the order of ITAT does not suffer from any illegality
and why the grounds of Revenue are not acceptable
and why the appeal does not involve any substantial
question(s) of law or though framed cannot be
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answered in Revenue’s favour, the impugned order
suffers from jurisdictional errors and, therefore,
legally unsustainable for want of compliance of the
requirements of subsections (4) and (5) of Section
260A of the Act.
17. This Court has consistently laid emphasis that
every order/judgment, which decides the lis
between the parties, must contain the
reason(s)/ground(s) for arriving at a particular
conclusion.
18. Indeed, what is decisive for deciding the case is
not the conclusion alone but the
reason(s)/ground(s) assigned in support of such
conclusion, which results in reaching to such
conclusion.
19. In order to decide as to whether the impugned
order is legally sustainable or not, the Appellate
Court is entitled to know as to what impelled the
Court below to pass such order in favour of one
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party and against the aggrieved party. We find that
this requirement is missing in the impugned order
of this case and hence the interference is called for.
(See State of Maharashtra vs. Vithal Rao Pritirao
(1981) 4 SCC 129,
Chawan, Jawahar Lal Singh vs.
Naresh Singh & Ors., (1987) 2 SCC 222, State of
U.P. vs. Battan & Ors. , (2001) 10 SCC 607, Raj
(2003) 11
Kishore Jha vs. State of Bihar & Ors.,
SCC 519 and State of Orissa vs. Dhaniram Luhar,
(2004) 5 SCC 568).
20. In view of the foregoing discussion, we allow
the appeal, set aside the impugned order and
remand the case to the High Court with a request to
decide the appeal filed by the Revenue
(Commissioner of Income Tax) afresh on merits in
accordance with law.
21. Before parting, we may observe that we have
not expressed any opinion on the merits of the case
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having formed an opinion to remand the case to the
High Court in the light of our foregoing discussion.
The High Court will, therefore, decide the appeal in
accordance with law uninfluenced by any
observations made by this Court.
.………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[DINESH MAHESHWARI]
New Delhi;
February 27, 2019
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