2013 (3) TMI 309 - SC - Income Tax

Rejection of questions raised in the memo of appeal before the High Court - Held that - The High Court s power to frame substantial question(s) of law at the time of hearing of the appeal other than the questions on which appeal has been admitted remains under Section 260A(4). This power is subject to two conditions, i.e. the Court must be satisfied that appeal involves such questions, and the Court has to record reasons therefor. No justifiable reason to entertain this special leave petition, although delay of 72 days condoned.

Summary

Issues:
- Appeal admission under Section 260A of the Income Tax Act, 1961
- Scope of framing substantial questions of law by the High Court
- Interpretation of Section 260A(4) proviso
- Court's power to hear appeals on unformulated substantial questions
- Condonation of delay in special leave petition

Analysis:
The Supreme Court addressed the issue of appeal admission under Section 260A of the Income Tax Act, 1961. The Court noted that the Revenue had filed an appeal which was admitted by the High Court, with two substantial questions of law framed for consideration. The Revenue contended that other questions in the appeal memo had been implicitly rejected, but the Court clarified that the proviso to Section 260A(4) allows for the Court to hear the appeal on any other substantial question of law not formulated if it deems the case involves such a question.

Regarding the scope of framing substantial questions of law, the Court emphasized that the High Court retains the power to frame such questions during the appeal hearing, beyond those initially admitted. However, this power is subject to the conditions that the Court must be satisfied that the appeal involves such questions and must record reasons for doing so. The interpretation of Section 260A(4) proviso was crucial in determining the Court's authority in framing and considering substantial questions of law during the appeal process.

The judgment clarified the Court's power to hear appeals on unformulated substantial questions. It highlighted that the Court can consider such questions if satisfied that the case involves them, and must provide reasons for doing so. This analysis underscored the importance of adherence to procedural requirements and the need for clear reasoning in expanding the scope of questions during appeal hearings.

Lastly, the Court addressed the issue of condonation of delay in the special leave petition. Despite being inclined to condone a delay of 72 days, the Court found no justifiable reason to entertain the petition based on the legal position discussed. Consequently, the delay was condoned, and the special leave petition was dismissed, concluding the judicial decision on the matter.