2014 (4) TMI 218 - SC - Income Tax

Power of the High Court u/s 260A(4) of the Act - Questions in the memo rejected Held that - The Revenue is under some mis-conception The High Court's power to frame substantial question(s) of law other than the questions on which appeal has been admitted remains u/s 260A(4) - This power is subject to the conditions that the Court must be satisfied that appeal involves such questions and the Court has to record reasons there is no justifiable reason to entertain the petition Decided against Revenue.

Summary

Issues:
Interpretation of Section 260A of the Income Tax Act, 1961 regarding framing of substantial questions of law in appeals.

Analysis:
The Supreme Court considered an appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961. The Court noted that the High Court had admitted the appeal and framed two substantial questions of law for consideration. The Revenue contended that by implication, other questions raised in the appeal had been rejected. However, the Court clarified that the proviso following Section 260A(4) states that the appeal shall be heard only on the questions formulated, but this does not restrict the Court's power to consider other substantial questions if it deems necessary. The Court highlighted that the High Court retains the authority to frame substantial questions of law during the appeal hearing, beyond those initially admitted, subject to certain conditions. These conditions include the Court's satisfaction that the appeal involves such questions and the requirement to record reasons for doing so.

The Supreme Court emphasized that the High Court's power to frame substantial questions of law during the appeal hearing is governed by Section 260A(4) of the Income Tax Act. The Court reiterated that this power is not limited to only the questions initially admitted with the appeal. The Court's decision to consider additional substantial questions must be based on satisfying the conditions set out in the statute, including the need to record reasons for expanding the scope of the appeal. Ultimately, the Court found no valid reason to entertain the special leave petitions in this case and consequently dismissed them.