2000 (12) TMI 12 - HC - Income Tax

In the instant case, as stated earlier, even a question of law does not arise, not to speak of a substantial question of law. Moreover, in the present case, by the impugned order, the Tribunal even did not finally decide the factual dispute between the parties. It only remanded the matter to the Commissioner (Appeals) for deciding the controversy afresh after giving proper hearing to the parties. No substantial question of law or even a question of law can arise from such an order. - It is clear from the foregoing discussion that this appeal under section 260A of the Act is wholly misconceived.

Summary

Issues:
Appeal under section 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal remanding the matter to the Commissioner of Income-tax (Appeals) to decide the proper gross profit rate.

Analysis:
The High Court heard the appeal under section 260A of the Income-tax Act, 1961, against the decision of the Income-tax Appellate Tribunal. The Tribunal had remanded the matter to the Commissioner of Income-tax (Appeals) to determine the correct gross profit rate after providing an opportunity for both the assessee and the Assessing Officer to present their case. The appellant contended that the Tribunal should have decided the matter itself instead of remanding it. However, the High Court found that the Tribunal's decision was based on the Commissioner (Appeals) not properly applying his mind to the facts and circumstances of the case. The Tribunal remanded the matter to the Commissioner (Appeals) for a fresh determination after providing a proper opportunity for both parties to be heard. No legal issues were raised before the Tribunal, and no legal issues were decided, which could lead to a question of law justifying an appeal under section 260A of the Act.

Under section 260A of the Act, an appeal to the High Court is allowed only if it involves a substantial question of law. The High Court emphasized that the foundation of an appeal under this section is the presence of a substantial question of law. The distinction between a question of law and a substantial question of law was highlighted, with the latter directly and substantially affecting the parties' rights. The court referred to legal precedents to define what constitutes a substantial question of law, emphasizing that settled legal principles do not qualify as substantial questions of law. The judgment cited cases where the Supreme Court clarified that once a legal principle is settled, its application to specific cases does not constitute a substantial question of law.

In the present case, the High Court concluded that no substantial question of law arose as the Tribunal did not finally decide the factual dispute but remanded the matter for further consideration by the Commissioner (Appeals). The court emphasized that no legal issue, let alone a substantial question of law, arose from the Tribunal's order. The appeal was deemed misconceived, and it was dismissed with no order as to costs. The judgment underscored that for an appeal under section 260A of the Act, the case must involve a substantial question of law, which was not the situation in this instance.