2022 (4) TMI 398 - SC - Income Tax

Substantial question of law - HELD THAT - As the impugned order passed by the High Court is a non-speaking and non-reasoned order and even the submissions on behalf of the revenue are not recorded, the impugned order passed by the High Court dismissing the appeal is unsustainable. Under the circumstances, the impugned order is hereby quashed and set aside. The matter is remanded to the High Court to decide and dispose of the appeal afresh in accordance with law and on its own merits. If the High Court is of the opinion that the proposed questions of law are not substantial questions of law and they are on factual aspects, it will be open for the High Court to consider the same in accordance with law, however, the High Court to pass a speaking and reasoned order after recording the submissions made on behalf of the respective parties. The present appeal is allowed to the aforesaid extent.

Summary

Issues:
1. Appeal against the order of the High Court dismissing the appeal preferred by the Revenue.
2. Service of notice on the respondent.
3. Lack of reasoning in the impugned order by the High Court.
4. Remand of the matter to the High Court for fresh disposal.

Analysis:

Issue 1:
The Supreme Court heard an appeal filed by the Revenue against the order of the High Court of Gujarat, which dismissed the appeal preferred by the Revenue. The High Court had dismissed the appeal by observing that the questions proposed by the Revenue were not substantial questions of law but rather related to factual aspects of the matter. The Supreme Court found the High Court's order to be non-speaking and non-reasoned, with no independent reasoning provided for the dismissal. The Supreme Court, therefore, set aside the impugned order and remanded the matter back to the High Court for fresh disposal in accordance with the law and on its own merits. The High Court was directed to pass a speaking and reasoned order after recording the submissions made by the parties.

Issue 2:
The respondent, who was the assessee in the case, had been served notice as per the office report. Despite being granted an adjournment of three months, the respondent did not file a vakalatnama or appear on behalf of themselves. This led to the completion of the service of notice on the respondent.

Issue 3:
The Supreme Court noted that the High Court's impugned order lacked proper reasoning and did not record the submissions made on behalf of the Revenue. The Court emphasized that a non-speaking and non-reasoned order is unsustainable in law. Therefore, the Supreme Court quashed the impugned order and directed the High Court to decide and dispose of the appeal afresh with a proper consideration of the proposed questions of law and by providing a speaking and reasoned order.

Issue 4:
In conclusion, the Supreme Court allowed the present appeal to the extent of setting aside the impugned order and remanding the matter to the High Court for fresh disposal. No costs were awarded in the case. The decision highlighted the importance of a reasoned order and proper consideration of legal questions in the appellate process.