Commissioner of Income Tax vs Engineers India Ltd.

Heard Mr. R.P. Bhatt, learned senior Counsel for the Petitioner. We find that the appeal filed by the Revenue u/s 260A of the income tax Act, 1961 (for short, "the Act") has been admitted by the High Court and two substantial questions of law have been framed for consideration of the appeal.

The grievance of the Revenue is that by necessary implication, the other questions raised in the memo of appeal before the High Court have been rejected.

We are afraid that the Revenue is under some misconception. The proviso following the main provision of Section 260A(4) of the Act states that nothing stated in Sub-section (4), i.e., "The appeal shall be heard only on the question so formulated" shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question.

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 u/s 260A(4). This power is subject, however, to two conditions, (one) the court must be satisfied that appeal involves such questions, and (two) the court has to record reasons therefor. In view of the above legal position, we do not find any justifiable reason to entertain these special leave petitions. Accordingly, the special leave petitions are dismissed.