High Court's Order Dismissing Appeal Without Deciding Any Issue Deemed Unsustainable

The synopsis of the provided text is as follows:

1.Leave has been granted for this appeal.

2.The appeal is filed against the final judgment and order passed by the Bombay High Court in ITA No. 599/2015, where the appellant's appeal was dismissed.

3.The appeal revolves around the question of whether the respondent bank is entitled to claim deduction under Section 35-D (of Income Tax Act, 1961) for the Assessment Year in question, based on its classification as an industrial undertaking.

4.The Assessing Officer's order and subsequent proceedings before the Commissioner resulted in an adverse order against the respondent.

5.The respondent appealed to the Income Tax Appellate Tribunal (ITAT), and the ITAT allowed the appeal.

6.The Revenue (Income Tax Department) filed an appeal in the High Court under Section 260-A (of Income Tax Act, 1961).

7.The High Court dismissed the appeal, leading to the filing of this special leave appeal in the Supreme Court.

8.The Supreme Court allows the appeal, sets aside the High Court's order, and remands the case to the High Court for a fresh decision on the merits.

9.The Supreme Court notes that the High Court failed to frame any substantial question of law and dismissed the appeal without deciding the main issue regarding the applicability of Section 35-D (of Income Tax Act, 1961).

10.The Supreme Court emphasizes the need to remand the case to the High Court and decide the appeal afresh on merits.

11.The High Court should have framed the substantial question of law and answered it in accordance with the law.

12.The Supreme Court is informed that the issue of the applicability of Section 35-D (of Income Tax Act, 1961) to the respondent bank is already pending before the High Court in another appeal, suggesting that both appeals should be decided together.

13.The impugned order of the High Court is deemed legally unsustainable.

14.The appeal is allowed, the impugned order is set aside, and the case is remanded to the High Court for a fresh decision on merits, along with the other pending appeal.

15.The Supreme Court refrains from expressing any opinion on the merits of the case and emphasizes that the High Court should decide the appeal without being influenced by any observations made in previous orders.

16.The appeal succeeds and is allowed in view of the foregoing discussion.

This synopsis provides an overview of the appeal, highlighting the procedural issues in the High Court's order and the need for a fresh decision on the merits by the High Court. It also mentions the Supreme Court's decision to remand the case and emphasizes the importance of framing substantial questions of law and considering the pending appeal related to the same issue.

1. Leave granted.

2. This appeal is filed against the final judgment and order dated 01.08.2017 passed by the High Court of Judicature at Bombay in ITA No.599/2015 whereby the High Court dismissed the appeal filed by the appellant herein.

3. This appeal involves a short point as would be clear from the facts stated infra.

4. The appellant is the Union of India (Income Tax Department) and the respondent ­Bank is the assessee.

5. In the course of assessment proceedings of the respondent­ assessee(Bank) for the Assessment Year 2007­-2008, the question arose as to whether the

respondent­ assessee(Bank) was entitled to claim deduction under Section 35 (of Income Tax Act, 1961)­D of the Income Tax Act, 1961 (for short, “the Act”) for the Assessment

Year in question. In other words, the question arose as to whether the respondent­ Bank is an industrial undertaking so as to entitle them to claim deduction under Section 35 (of Income Tax Act, 1961)­D of the Act.

6. The case of the respondent was that they, being an industrial undertaking, are entitled to claim the deduction under Section 35 (of Income Tax Act, 1961)­D of the Act.

The Assessing Officer passed an order dated 31.10.2009 which gave rise to the proceedings before the Commissioner under Section 263 (of Income Tax Act, 1961) which resulted in passing of an adverse order dated 14.11.2011 by the Commissioner.

7. This gave rise to filing of the appeal by the respondent before the ITAT against the order of the Commissioner. By order dated 05.12.2014, the ITAT

allowed the appeal which gave rise to filing of the appeal by the Revenue (Income Tax Department) in the High Court under Section 260 (of Income Tax Act, 1961)­A of the Act.

8. By impugned order, the High Court dismissed the appeal after hearing both the parties giving rise to filing of this appeal by way of special leave in this Court.

9. So, the short question that arises for consideration in this appeal, is whether the High Court was justified in dismissing the appellant's appeal.

10. Having heard the learned counsel for the parties and on perusal of the record of the case, we are constrained to allow the appeal, set aside the

impugned order and remand the case to the High Court for deciding the appeal afresh on merits in accordance with law.

11. In our view, the need to remand the case to the High Court is called for due to the following reasons.

12. First, the High Court did not frame any

substantial question of law as is required to be

framed under Section 260 (of Income Tax Act, 1961)­A of the Act though

heard the appeal bipartite. In other words, the High

Court did not dismiss the appeal in limine on the

ground that the appeal does not involve any

substantial question of law; Second, the High Court

dismissed the appeal without deciding any issue

arising in the case saying that it is not necessary.

(see para 6).

13. Third, the main issue involved in this appeal,

as rightly taken note of by the High Court in para 6,

was with regard to the applicability of Section 35 (of Income Tax Act, 1961)­D

of the Act to the respondent ­assessee(Bank). It was,

however, not decided.

14. In our view, the High Court should have

framed the substantial question of law on the

applicability of Section 35 (of Income Tax Act, 1961)­D of the Act in addition to

other questions and then should have answered

them in accordance with law rather than to leave

the question(s) undecided.

15. It was brought to our notice that the issue with

regard to applicability of Section 35 (of Income Tax Act, 1961)­D of the Act to

the respondent ­Bank is already pending consideration before the High Court at the instance of the respondent in one appeal. If that be so, both

the appeals, in our view, should be decided together.

16. It is for all these reasons, we are of the view

that the impugned order is not legally sustainable.

17. In view of the foregoing discussion, the appeal

succeeds and is accordingly allowed. The impugned

order is set aside. The appeal is accordingly

remanded to the High Court for its decision on

merits in accordance with law along with another

appeal, if pending, after framing proper substantial

question(s) of law arising in the case.

18. We have not expressed any opinion on the

merits of the case having formed an opinion to

remand the appeal to the High Court for its disposal

on the merits afresh. The High Court will

accordingly decide the appeal uninfluenced by any

observations made in the impugned order and this

order.

[ABHAY MANOHAR SAPRE]

[DINESH MAHESHWARI]

New Delhi;

March 15, 2019