Income Tax Act, 1961 – ss.35-D, 260-A and 263 – Issue was as to whether the respondent-Bank (assessee) is an industrial undertaking so as to entitle them to claim deduction u/s.35-D of the 1961 Act – After the Assessing Officer passed order, adverse order was passed by the Commissioner – Income Tax Appellate Tribunal (ITAT) allowed the appeal filed by the respondent – Appeal by the appellant-Revenue in the High Court u/s.260-A of the 1961 Act – Dismissed – On appeal, held: High Court did not frame any substantial question of law as is required to be framed u/s.260-A of the 1961 Act – High Court dismissed the appeal without deciding any issue arising in the case saying that it is not necessary – Main issue involved in this appeal, as rightly taken note of by the High Court, was with regard to the applicability of s.35-D of the 1961 Act to the respondent, it was however, not decided – Impugned order set aside – Issue with regard to applicability of s.35-D of the 1961 Act to the respondent is already pending consideration before the High Court at the instance of the respondent in another appeal – Accordingly, appeal remanded to the High Court for its decision on merits in accordance with law along with another appeal, if pending – No opinion expressed on the merits of the case. Allowing the appeal, the Court
HELD: 1.1 The High Court did not frame any substantial question of law as is required to be framed under Section 260-A of the Income Tax Act, 1961 though heard the appeal bipartite. In other words, the High Court did not dismiss the appeal in limine on the ground that the appeal does not involve any substantial question of law. The High Court dismissed the appeal without deciding any issue arising in the case saying that it is not necessary. The main issue involved in this appeal, as rightly taken note of by the High Court in para 6, was with regard to the applicability of Section 35-D of the 1961 Act to the respondent-assessee (Bank). It was, however, not decided. [Paras 12, 13] [9-C-E]
1.2 The High Court should have framed the substantial question of law on the applicability of Section 35-D of the 1961 Act in addition to other questions and then should have answered them in accordance with law rather than to leave the question(s) undecided. [Para 14] [9-E-F]
1.3 The impugned order is set aside. It was brought to Court’s notice that the issue with regard to applicability of Section 35-D of the 1961 Act to the respondent-Bank is already pending consideration before the High Court at the instance of the respondent in one appeal. The appeal is accordingly remanded to the High Court for its decision on merits in accordance with law along with another appeal, if pending, after framing proper substantial question(s) of law arising in the case. No opinion is expressed on the merits of the case having formed an opinion to remand the appeal to the High Court for its disposal on the merits afresh. The High Court will accordingly decide the appeal uninfluenced by any observations made in the impugned order and this order. [Paras 15, 17, 18] [9-F-H; 10-A-C]
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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