Delhi High Court
Commissioner Of Income Tax vs Kuwer Fibers (P) Ltd. on 10 July, 2003
Equivalent citations: (2003)183CTR(DEL)256, [2003]264ITR499(DELHI), [2003]176TAXMAN536(DELHI)
Author: A.K. Sikri
Bench: A.K. Sikri
JUDGMENT B.C. Patel, C.J.
1. While admitting the IT Appeal No. 163 of 2001, Division Bench on 10th Dec., 2001, after hearing learned counsel for the appellant, framed the substantial question of law. This application is filed for recalling the order made by the Division Bench at the stage of admission formulating the question of law. Learned counsel for the applicant submitted that there is usual practice in this Court that before framing the questions of law, the respondents are to be heard, irrespective of the fact that appeal is filed by the assessed or by the Revenue.
2. Section 260A of the IT Act, 1961, is required to be perused for this purpose and particularly Sub-sections (3) and (4). We reproduce Sub-sections (3) and (4) of Section 260A of the IT Act, 1961 :
"(3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.
(4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question :
Provided that nothing in this sub-section 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."
3. According to learned counsel for the applicant, a plain reading of these two sub-sections makes it abundantly clear that before framing a question of law the Court should hear the respondents. He submits that proper assistance can be rendered by the respondents at the time of framing the question of law. Further, at this stage the respondent would also be in a position to argue that there is no substantial question of law and in that eventuality appeal itself may be dismissed.
4. This submission is contrary to the provisions contained in Sub-section (3) and (4) of Section 260A of the IT Act, 1961. In matters of admission in High Court, the matters are first placed for admission so as to find out whether there is any substance in the matter or not and the matter requires any further investigation or not. That is between the appellant and the Court. It is for the appellant to satisfy the Court that there is some substance in the appeal and, therefore, appeal is required to be admitted. In case of second appeal or in case of appeal under Section 260A of the IT Act, 1961, substantial question of law is required to be framed by the Court. It is Known that at the time of passing ad interim relief, the respondent is not required to be heard. If he appears on caveat then he may be heard as to whether ad interim relief is to be granted or not. Even if the respondent appears on caveat, his right is very limited. He can be heard on the question of granting ad interim relief but he has no right to contend with regard to the admission of the appeal. It is a different matter that the Court may take into consideration the submission made by the respondent at this stage and dismiss the matter.
However, there is no right in law to say that he must be heard at the time of admission. Sub-section (7) of Section 260A of the IT Act, 1961, makes it clear that the provisions contained in the CPC, 1908 relating to High Court shall as far as may be applied in the case of appeals under this section.
5. Sub-section (3) of Section 260A of the IT Act, 1961, makes it clear that the Court must be satisfied that there is a substantial question of law and, therefore, that question of law is required to be formulated. There is no mandatory requirement of issuing notice in appeal before its admission or before formulating questions of law, Even after the admission of appeal or framing questions of law notice is required to be issued for hearing of the appeal. Therefore, Sub-section (4) of Section 260A of the IT Act, 1961, makes it clear that appeal shall be heard on the question so formulated. Even at the time of hearing of appeal the respondent has right to argue that case does not involve such question and if the Court is satisfied may dismiss on that ground. The very fact that the respondent is given right to argue that the case does not involve such question even at the time of hearing of the appeal is also a clear indicator that substantial question of law can be formulated under Sub-section (3) of Section 260A of the IT Act, 1961, without hearing the respondent. Thus there is sufficient safeguards insofar as respondent is concerned as the respondent has a right to make his submission at the time of hearing of appeal that the question formulated was substantial or not. It may be a practice to hear the respondent before admitting the appeal or formulating question of law. However, it cannot be said that if appeal is admitted or question of law framed without hearing the respondent, it is violative of any provisions of law or is impermissible. In view of this we find no reason to recall that order. Application stands rejected.