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TMI Blog1981 (6) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Allahabad High Court in the case of Madho Prasad vs. CIT 1976 CTR (All) 334 : (1978) 112 ITR 492 (All). Similar stand was taken by the ITO in respect of asst. yrs. 1976-77 and 1977-78. 2. The assessee challenged the orders. Of the ITO before the AAC and pointed out to him that the Hon'ble Andhra Pradesh High Court and the Hon'ble Gujarat High Court had taken different view in CIT vs. Sanka Sankaraiah 1978 CTR (AP) 24 : (1978) 113 ITR 313 (AP) and Dinu Bhai Ishwar Lal Patel vs. Disit, K.D. (1979) 118 ITR 122 (Guj) respectively and that, therefore, the orders of the ITO should be reversed. 3. The AAC, however, did not accept the assessee's contention and pointed out and in our opinion, rightly that the decision of the Hon'ble Allahabad High Court was binding on him and the ITO and therefore, the orders of the ITO had to be upheld. 4. Aggrieved with the aforesaid combined order of the AAC, the assessee has filed the present appeals before us. It is not the contention of the assessee that the facts of the present appeals are not fully and squarely covered by the decision of the Hon'ble Allahabad High Court in Madho Prasad's case 1976 CTR (All) 334 : (1978) 112 ITR 492 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment decree determination, sentence or order in any case or matter passed or made by any Court or Tribunal in the territory of India". According to the ld. Counsel, Mr. Sinha, the above Article gave to the Hon'ble Supreme Court and overriding power to admit in their discretion an appeal against any order passed by any court or any Tribunal in India, though such power was used by them sparingly. Our attention was invited by the ld. Counsel in this connection to the decisions of the Hon'ble Supreme Court in this case of Engineering Mazdoor Sabha vs. Hind Cycle Ltd. AIR 1963 SC 874, 877 and in the State Govt., M.P. vs. Ram Krishna Ganpat Rao Limsey AIR 1954 SC 20. The ld. Counsel then drew our attention to the order XVI of the Supreme Court Rules, 1966, particularly r. (6),(5) and (11) thereof. The above order deals with "Appeals by Special :Leave". The said rules read as follows : "Rule 4 — The petition shall state succinctly and clearly all such facts as may be necessary to enable the court to determine whether special leave to appeal ought to be granted and shall be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eave Petition is very brief. Reasons for dismissal are not given but that is so because it is the practice of the Hon'ble Supreme Court. But for that reason, it cannot be said that the rights of the parties are not adjudicated upon thereby. Even a one word order saying "dismissed" determines the rights of the parties, as held by their Lordships of the Bombay High Court in Nandlal Shankerlal Tiwari vs. Laxman Uma Kant Malkarjun, AIR 1970 Bom 268, and the decision of the same High Court in S.M. Diks vs. G.H. Manker AIR 1980 Bom 231 and, therefore, when the Hon'ble Supreme Court refused special leave to appeal to the Department against the decision of the Andhra Pradesh High Court in the case of S. Sankaraiah, referred to above, it has to be presumed that all the issues raised were adjudicated upon by their Lordships and it was only thereafter that their Lordships refused special leave to appeal to the Department. It was all the more so, when in the said case, the Revenue had pointedly brought to the attention of the Supreme Court that two views of the law were being expressed by different High Courts, and that the view of the Hon'ble Allahabad High court was contrary to what the Andh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial Leave Petition becomes an appeal only after it is admitted and once the appeal is admitted, it is listed for hearing in accordance with rules stipulated in Order XV of the Supreme Court Rules, 1966 and the judgment of the Hon'ble Supreme Court on the merits of the appeal comes only thereafter. To presume that an order refusing Special Leave Petition in a case also determines the merits of that appeal, is, in our opinion, unwarranted by the very nature of the proceedings before their Lordships of the Hon'ble Supreme Court. The case of Madho Prasad 1976 CTR (All) 334: (1978) 112 ITR 492 is lying for adjudication before their Lordships of the Hon'ble Supreme Court as regular appeal in terms of s. 261 of the IT Act, 1961, and a decision on that appeal is bound to come in course of time. So long as a decision disapproving that judgment is not given by their Lordships of the Supreme Court, it would not at all be correct to say that their Lordship have disapproved the decision in the case of Madho Prasad 1976 CTR (All) 334 : (1978) 112 ITR 492 by their Lordships of the Allahabad High Court. It is true that the Special Leave Petition of the Department in the case of S. Sankaraiah 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 ITR 527, while deciding the appeal in the case of Indian Chamber of Commerce vs. CIT 1975 CTR (SC) 271 : 101 ITR 796, their Lordships of the Hon'ble Supreme Court had made the following observation with regard to the decision of the Hon'ble Kerala High Court in the case of CIT vs. Dharmodayan Co. (1974) 94 ITR 113 (Ker). "among the Kerala cases which went on the wrong test we wish to mention one, Dharmodayan Co.'s case (1974) 94 ITR 113 (Ker). The assessee company was conducting a profitable business of running chit funds and its Memorandum of Association had as one of its objects to do the needful for the promotion of charity, education and industry". The court found it possible on these facts to grant the benefit of s. 2(15) by a recondite reasoning. If this ratio were to hold good, business have a high road to tax avoidance. Dharmodayan Co.'s case (1974) 94 ITR 113 (Ker) shows how dangerous the consequence can be if the provisions were misconstrued." When the appeal in the case of Dharmodayan Co.'s case came up for hearing before their Lordships of the Hon'ble Supreme Court, the counsel for the Revenue suggested that the aforesaid case also stood overruled by the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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