COMMISSIONER OF INCOME TAX-IversusM/S RASHTRADOOT (HUF)

868                       [2019]
               SUPREME COURT     4 S.C.R. 868
                              REPORTS                     [2019] 4 S.C.R.


A                   COMMISSIONER OF INCOME TAX-I
                                       v.
                         M/S RASHTRADOOT (HUF)
                        (Civil Appeal No.2362 of 2019)
B                            FEBRUARY 27, 2019
                    [ABHAY MANOHAR SAPRE AND
                      DINESH MAHESHWARI, JJ.]
             Income Tax Act, 1961 – s.260A – Substantial question of law
C     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
D     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
E     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.

F            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
G     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.


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                                      868
            COMMISSIONER OF INCOME TAX-I v.                           869
               M/S RASHTRADOOT (HUF)

     Allowing the appeal and remitting the matter to High Court,      A
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              B
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]
                                                                      C
      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     D
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        E
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     F
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.     G
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]
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870            SUPREME COURT REPORTS                      [2019] 4 S.C.R.


A           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
B
      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
C           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.
D                            Case Law Reference
            (1981) 4 SCC 129              relied on          Para 19
            [1987] 2 SCR 220              relied on          Para 19
            (2001) 10 SCC 607             relied on          Para 19
E
            [2003] 4 Suppl. SCR 208       relied on          Para 19
            [2004] 2 SCR 68               relied on          Para 19


            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2362
F     of 2019
            From the Judgment and Order dated 25.10.2016 by the High Court
      of Judicature for Rajasthan bench at Jaipur in D.B. Income Tax Appeal
      No. 43 of 2002.

G           Ashok K. Srivastava, Arjun Garg, Aakash Nandolia
      (for Mrs. Anil Katiyar), Advs. for the Appellant.
            Kavin Gulati, Anant Kashliwal, Bhargava V. Desai, Rohit
      Shathlekar, Ms. Vasudha Zutshi, Advs. for the Respondent.

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             COMMISSIONER OF INCOME TAX-I v.                                  871
                M/S RASHTRADOOT (HUF)

      The Judgment of the Court was delivered by                              A
      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 in D.B. Income Tax Appeal No. 43 of 2002 whereby the Division
Bench of the High Court dismissed the appeal filed by the appellant           B
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.
                                                                              C
       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 1987-88 to 1996-97 and 1997-98 up to             D
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 the respondent against the order of the
assessing authorities.                                                        E
      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”).                                       F
      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         G
remand the case to the High Court for deciding the appeal afresh on
merits in accordance with law.



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872            SUPREME COURT REPORTS                          [2019] 4 S.C.R.


A            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 :
B
            “12. The Tribunal while considering the judgment on
            24.05.2001 did not consider the amendments envisaged by
            the legislature, therefore, under Section 260-A when we
            are considering substantial law, we have to consider
            whether the Tribunal has committed an error.
C
            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.”
D
            9. A perusal of the aforementioned two concluding paragraphs
      would go to show that the High Court has neither discussed and nor
      assigned any reason in support of its conclusion for the dismissal of the
      appeal.

E            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
F     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.
G
            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


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         COMMISSIONER OF INCOME TAX-I v.                                         873
 M/S RASHTRADOOT (HUF) [ABHAY MANOHAR SAPRE, J.]

of the appeal in limine, i.e., dismissal without issuing any notice of appeal    A
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             B
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 question(s) of          C
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)           D
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.
       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            E
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 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)           F
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              G
conclusion alone but the reason(s)/ground(s) assigned in support of such
conclusion, which results in reaching to such conclusion.



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874              SUPREME COURT REPORTS                        [2019] 4 S.C.R.


A            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 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 Chawan, (1981)
B
      4 SCC 129, Jawahar Lal Singh vs. Naresh Singh & Ors., (1987) 2
      SCC 222, State of U.P. vs. Battan & Ors., (2001) 10 SCC 607, Raj
      Kishore Jha vs. State of Bihar & Ors., (2003) 11 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
C     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 having formed an opinion to remand
D     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.


      Devika Gujral                                               Appeal allowed.
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