Bikram Singh Vs PCIT (Supreme Court of India)
Supreme Court of India has set aside a judgment by the Delhi High Court in a tax appeal, citing a clear procedural non-compliance with Section 260A of the Income Tax Act, 1961. The apex court remanded the case back to the Delhi High Court, instructing it to adhere strictly to the statutory requirements for entertaining and hearing appeals.
The appellant, Bikram Singh, an assessee, challenged the Delhi High Court’s judgment dated August 25, 2017, in ITA No. 55/2017. The primary grievance was that the High Court had disposed of the respondent-Revenue’s appeal on merits without first formulating a substantial question of law, as mandated by Section 260A of the Income Tax Act.
Mr. C. S. Aggarwal, learned Senior Counsel for the appellant, argued that the High Court’s procedure was fundamentally flawed. He pointed out that the “question of law” was only formulated after arguments on merits had been heard and the judgment reserved, rather than at the stage of admitting the appeal. He contended that this amounted to a reversal of the prescribed procedure.
Section 260A of the Income Tax Act governs appeals to the High Court from orders passed by the Appellate Tribunal. Sub-section (3) of Section 260A explicitly states that “Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.” Sub-section (4) further clarifies that “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.” A proviso allows the court to hear an appeal on another substantial question of law not initially formulated, but only for recorded reasons and if it is satisfied that the case involves such a question.
