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

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

Chawan, (1981) 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 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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