INCOME TAX ACT, 1961

Section 260A

Appeal [High Court] - Substantial question of low - High Court on earlier occasion refused to frame question as substantial question, whether question to be reconsidered -

Assessee deals in mining, processing, and exporting of iron ore. For the assessment year 2008-09, it filed the returns. Through the order dated 13-12-2010, the AO disallowed certain expenditure under section 14A. Aggrieved, the assessee appealed to the CIT(A) who partly allowed the appeal. Then, though the assessee and the revenue filed appeals before the Tribunal. The Tribunal dismissed revenue's appeal but allowed assessee's. In that context, the revenue filed this Tax Appeal. This Court admitted the revenue's appeal through an Order, dated 7-1-2016. Out of the Sl. Nos. (a) to (c) substantial questions of law the revenue had framed, the Court, then, accepted questions (a) and (c) as substantial questions of law and reframed them. It had expressly refused to accept the revenue's question (b) as a substantial question of law. To justify its refusal to accept the substantial question of law, this Court had felt that an identical question already stands answered. To elaborate, this Court had noted that in Tax Appeal No. 15/2012, a Division Bench framed a similar issue and answered it against the revenue. Later, the Supreme Court dismissed the revenue's Special Leave to Appeal (C) No. 24920/2012. The revenue, had come up with a Miscellaneous Application. It wanted the court to frame a few more questions of law. Held: Sub-section (4) of section 260A, especially the proviso appended to it, liberates the High Court to formulate and hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it. But it does not, despite the Revenue's insistence, empower the High Court to reconsider its earlier view in the same proceedings and reformulate a question of law which it had refused to formulate. In other words, (1) a question that escaped the attention of Court earlier, or (2) a question the appellant not presented to the Court, or even (3) a question that cropped up because of subsequent developments stands on a different footing. But a question the High Court consciously refused to treat as a substantial question of law fails to qualify under none of the above three categories. The revenue ought to have challenged this Court's Order, dated 7-1-2016, which refused to frame a particular question as a substantial question of law. That said, the revenue is not remediless.

Distinguished:Sir Chunilal Mehta & Sons v. Century Spinning and Mfg Ltd. AIR 1962 SC 1314, CIT-I, Lucknow, v. Indo-Gulf Fertilizers Ltd. (2012) 26 taxmann.com 66 (Allahabad) : 2013 TaxPub(DT) 0791 (All-HC), CIT-I v. Forest Development Corporation of Maharashtra Ltd. (2017) 84 taxmann.com 294 (Bombay) : 2017 TaxPub(DT) 4017 (Bom-HC)Relied:Jethabhai Hirji and Co. v. CIT (1949) 17 ITR 533 (Bom-HC) : 1949 TaxPub(DT) 52 (Bom-HC) and Kishanchand v. Ramkrishna 1991 SCC OnLine MP 105.

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