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2020 (10) TMI 1027 - HC - Income TaxSubstantial questions law - Court’s earlier refusal to frame a third substantial question of law - HELD THAT:- 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 Court’s earlier attention, 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. Revenue ought to have challenged this Court’s order, dated 7 January 2016, which refused to frame a particular question as a substantial question of law. That said, the Revenue is not remediless. If it chooses to question the High Court's judgment u/s 260A of the Act before the Apex Court, it may have its options open. It may comprehensively contend even on the grounds that the High Court has erred in not formulating a substantial question of law at the stage of admission. Res Judicata and Tax Disputes - second contention the Revenue has advanced is that the concept of res judicata is alien to the tax jurisprudence - Forest Development Corporation of Maharashtra Ltd., Forest Development Corporation of Maharashtra Ltd., found “no distinction in facts or law” between the orders for AY 2002-03 and AY 2003-04. Unquestionable as the proposition of law in Forest Development Corporation of Maharashtra Ltd., we wonder how it relates to the issue before us. Regrettably, this case does not help the Revenue’s cause. What we have been faced with may not be termed res judicata per se. In some jurisdictions, it is called the law of the case: entertaining what has been rejected earlier in the same proceedings. And we have addressed that principle above. So even if we were to hold that res judicata is alien to adjudication under taxation regime, that plea is unavailable for the Revenue here. Maintainability of appeal - Circular - Ministry of Finance, the Government of India, has issued Circular No.17/2019. It reveals the Revenue’s policy decision. To file appeals before the High Court, the Central Board of Direct Taxes has fixed the limit of ₹ 1,00,00,000/-. Here, the disputed tax falls short of that amount. In tune with the Revenue’s consistent policy, the learned Standing Counsel has already told us that if this Court does not find favour with the Revenue on the additional substantial questions of law it wanted us to frame, there is nothing further in this matter to be adjudicated. Given this Court’s earlier refusal to frame a third substantial question of law, now it has been left with only two questions of law. And because of the Circular CBDT No.17/2019, dt. 08.08.2019 and clarification dated 20.08.2019, these questions of law need no adjudication, for the disputed tax falls below ₹ 1 Crore.
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