Substantial question of law under Section 260-A required merits review; summary dismissal of the Revenue appeal was set aside.

A formulated question under Section 260-A concerning an assessee's claim under Section 80HHC was held to raise a substantial question of law. The Supreme Court found that the High Court should not have dismissed the Revenue's appeal in limine without examining that question on merits. The summary dismissal was therefore set aside, and the matter was remanded to the High Court for decision on the substantial question of law after hearing both parties.

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Issues: Whether the High Court was justified in dismissing the Revenue's appeal in limine on the ground that no substantial question of law arose.

Analysis: The appeal under Section 260-A of the Income-tax Act, 1961 had raised a formulated question concerning the assessee's claim under Section 80HHC. The Supreme Court found that the formulated question was a substantial question of law arising for determination. In those circumstances, the High Court ought not to have dismissed the appeal in limine without examining the question on merits.

Conclusion: The High Court's summary dismissal was set aside and the matter was remanded to the High Court for decision on the substantial question of law after hearing both parties.

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