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

the High Court of Karnataka, Circuit Bench at

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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