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2019 (4) TMI 957 - SC - Income TaxMandatory procedure u/s 260A for appeal before High Court - reopening u/s 147 - no factual foundation for issue of notice - no “escaped assessment” - no valid “reason to believe” - High Court dismissed the appeal stating no substantial question of law arises - distinction between the questions proposed by the appellant for admission of the appeal and the questions framed by the Court - HELD THAT:- The questions, which are proposed by the appellant, fall under Section 260A (2) (c) of the Act whereas the questions framed by the High Court fall under Section 260A (3) of the Act. The appeal is heard on merits only on the questions framed by the High Court under subsection (3) of Section 260A of the Act as provided u/s 260A (4). In other words, the appeal is heard only on the questions framed by the Court. If the High Court was of the view that the appeal did not involve any substantial question of law, it should have recorded a categorical finding to that effect saying that the questions proposed by the appellant either do not arise in the case or/and are not substantial questions of law so as to attract the rigor of Section 260A of the Act for its admission and accordingly should have dismissed the appeal in limine. In our view, the respondent had a right to argue “at the time of hearing” of the appeal that the questions framed were not involved in the appeal and this the respondent could urge by taking recourse to subsection (5) of Section 260A of the Act. But this stage in this case did not arise because as mentioned above, the High Court neither admitted the appeal nor framed any question as required under subsection (3) of Section 260A of the Act. The expression “such question” referred to in subsection (5) of Section 260A of the Act means the questions which are framed by the High Court under subsection (3) of Section 260A at the time of admission of the appeal and not the one proposed in Section 260A (2) (c) of the Act by the appellant. High Court should have seen that substantial questions of law do arise in the appeal for being answered on their respective merits. The impugned order is set aside. The case is remanded to the High Court for deciding the appeal filed by the Commissioner of Income Tax-Mumbai afresh on merits as provided u/s 260A( 4) of the Act to answer the three questions framed by this Court under Section 260A( 3).
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