Income Tax Act, 1961 – s.260A – Substantial question of law arising not framed by High Court while deciding the appeal – In the instant case, High Court did not dismiss the appeal in limine but dismissed it after hearing both the parties – Correctness of – Held: In such a situation, High Court should have framed the questions and answered them by assigning the reasons accordingly one way or the other by exercising powers under sub-sections (4) and (5) of s.260A of the Act – In the absence of any discussion or/and the reasoning/ground as to why the order of ITAT did not suffer from any illegality and why the grounds of Revenue are not acceptable and why the appeal does not involve any substantial questions of law or though framed cannot be answered in Revenue’s favour, the impugned order suffers from jurisdictional errors and, therefore, legally unsustainable for want of compliance of the requirements of sub-sections (4) and (5) of s.260A of the Act – Matter remitted to High Court for consideration afresh – Code of Civil Procedure, 1908 – s.100.
Judgments/Orders – Reasoned/Speaking order – Every order/judgment, which decides the lis between the parties, must contain the reasons/grounds for arriving at a particular conclusion – 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 party and against the aggrieved party – In the instant case, this requirement was missing and, therefore, interference was called for – Income Tax Act, 1961 – s.260A.
Allowing the appeal and remitting the matter to High Court, the Court
HELD: 1. The High Court neither discussed and nor assigned any reason in support of its conclusion for the dismissal of the appeal. The observation made in paragraph 13 that “In view of the above” did not lead anywhere because, in the paragraphs 1 to 12, no reasons were mentioned except the facts and the submissions. That apart, the High Court while deciding the appeal heard the counsel for the parties, yet did not frame any substantial question of law arising in the case. [Paras 9, 10 and 11] [872-D-F]
2. Section 260A of the Act is akin to Section 100 of the Code of Civil Procedure, 1908 with addition of sub-sections (6)(a), 6(b) and (7) of Section 260A of the Act. 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. The High Court has also the jurisdiction to dismiss the appeal by answering the questions framed on merits or by dismissing the appeal on the ground that the questions though framed but such questions 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 Court has jurisdiction to allow the appeal but this the High Court can do only after framing the substantial questions of law and hearing the respondent by answering the questions framed in appellant’s favour. However, in this case, 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 sub-sections (4) and (5) of Section 260A of the Act. [Paras 12, 13,
14 and 15] [872-G-H; 873-A-E]
3. Every order/judgment, which decides the lis between the parties, must contain the reasons/grounds for arriving at a particular conclusion. Indeed, what is decisive for deciding the case is not the conclusion alone but the reasons/grounds assigned in support of such conclusion, which results in reaching to such conclusion. This requirement is missing in the impugned order of this case and hence the interference is called for. [Paras 17-19] [ 873-F-H; 874-B]
State of Maharashtra v. Vithal Rao Pritirao Chawan (1981) 4 SCC 129; Jawahar Lal Singh v. Naresh Singh & Ors. (1987) 2 SCC 222 : [1987] 2 SCR 220; State of U.P. v. Battan & Ors. (2001) 10 SCC 607; Raj Kishore Jha v. State of Bihar & Ors. (2003) 11 SCC 519 : [2003] 4 Suppl. SCR 208 ; State of Orissa v. Dhaniram Luhar (2004) 5 SCC 568 : [2004] 2 SCR 68 –
relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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