TaxTMI 
TaxTMI 
2012 (10) TMI 332
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....wing the interest on refund computed under section 143(1) of the Act even though no such interest was due under section 244-A of the Act ?" 2. During the course of final hearing, on 15.9.2011, Shri D.D.Chopra, learned counsel for the appellant had invited attention towards substantial question of law framed by this court (supra) and submitted that one additional substantial of law should be framed and admitted keeping in view the pleading on record and after taking into account the substantial question of law at Sl. No. 1which was already proposed in the present appeal as under :- "Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal is justified in holding the cost of machinery spares as revenue expenditure purchased admittedly in the period 1985-86 to 2000-01 and capitalized in a single assessment year." Being satisfied with the argument advanced by the appellant, when we proceeded to dictate the order to frame another substantial question of law, Shri J.D.Mistri learned Senior Counsel, representing the respondents- assessee submitted that he wants to cite certain case laws in support of his argument to the effect that no addit....
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....er this sub- section shall be-- (a) filed within one hundred and twenty days from the date on which the order appealed against is received by the assessee or the Chief Commissioner or Commissioner. (b) [***] (c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved. [2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.] (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) 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 : Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. (5) The High Court s....
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....ned Senior counsel we have deferred the hearing and on 29.9.2012 again, we have heard learned counsel for the parties with regard to court's right to frame additional substantial question of law keeping in view the provisions contained in Section 260 A of the Act. 4. Section 260 A of the Income Tax Act requires interpretation with regard to framing of additional substantial question of law at later stage, particularly, during the course of hearing. For convenience Section 260 A of the Income Tax Act is reproduced as under:- Section 260A-- APPEAL TO HIGH COURT (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal [before the date of establishment of the National Tax Tribunal], if the High Court is satisfied that the case involves a substantial question of law. (2) [The Chief Commissioner or the Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub- section shall be- (a) filed within one hundred and twenty days from the date on which the order appealed against is [received by the assessee or the Chief Commissioner or Commissi....
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.... frame additional substantial question of law by formulating new one, subject to satisfaction that the case involve such question. He relied on the ratio laid down in the case reported in [2011] 332 ITR 403 (Mad), Helios and Metheson information technology ltd. Vs. Assistant Commissioner of Income-Tax. 6. On the other hand, Shri J.D.Mistri, learned Senior Counsel assisted by Shri Ashish Bansal submits that the proviso should be interpreted keeping in view and within the ambit of Sub-Section 4 of Section 260 A of the Act. Learned counsel submits that by the proviso, right conferred by Sub-section 4 cannot be expanded. He further submits that courts have no jurisdiction to frame additional substantial question of law unless they are in the mid of hearing. He submits that framing of additional question of law would amount to review of order dated 20.4.2010 (supra) which is not permissible. The further submission of the learned Senior counsel is that since out of three questions framed by the appellant only two have been accepted and the third one shall deemed to be rejected. Hence, it cannot be a ground to frame additional question by de novo hearing. Once rejected then it amount t....
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....upreme Court in a case reported in AIR 1961 SC 1596, Shah Bhojraj Kuverji Oil Mills and Ginning Factory VS. Subhash Chandra Yograj Sinha. 10. In view of above, the proviso of sub-section 4 is an exception giving High Court a judicial discretion to frame additional substantial question of law during the course of hearing. The language used by the legislature in the proviso is quite clear and does not suffer from any ambiguity. 11. The legislature to their wisdom has used the words "nothing shall be deemed to take away or abridge the power of court", means, in spite of Sub section 4 of Section 260 A, Court may frame additional substantial question of law. Court may formulate another substantial question of law for the reasons recorded if satisfied and feels that such substantial question of law involves. REVIEW 12. It is incorrect to say that framing of another substantial question of law shall amount to review of order dated 20.4.2010. Argument seems to be misconceived. In Black's Law Dictionary word "review" has been defined as under:- "Review 1. Consideration, inspection, or reexamination of a subject or thing. 2. Plenary power to direct and instruct an agent ....
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....er, and the Court may make such order thereon as it thinks fit." 15. Order XLVII Rule 1 of the Code of Civil Procedure provides the condition under which a person aggrieved by an order or judgement may prefer a review under Section 114 of the Code of Civil Procedure. For convenience, Order XLVII Rule 1 of the CPC is reproduced as under:- "1. Application for review of judgment.- (1) Any person considering himself aggrieved,- (a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred, (b) by a decree or order from which no appeal is allowed, or (C) by a decision on a reference from a Court of Small Causes, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, 6r on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the Court which passed the decree or made the order. (2) A party who is not ....
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....provision has been added consciously to confer wide power on the High Court to formulate additional substantial question of law and in case High Court to do so, the provision contained in subsection 4 shall not come into the way. 19. In Black's Law Dictionary, word 'deemed' has been defined as under:- "To treat (something) as if (1) it were really something else, or (2) it has qualities that is does not have<although the document was not in fact signed until April 21, it explicitly states that it must be deemed to have been signed on April 14>. 2. To consider, think, or judge <she deemed it necessary> "Deem' has been traditionally considered to be a useful word when it is necessary to establish a legal fiction either positively by 'deeming something be what it is not or negatively by 'deeming' something not to be what it is...All other uses of the word should be avoided....Phrases like' if he deems fit' or 'as he deems necessary' or nothing in this Act shall be deemed to...'are objectionable as necessary deviations from common language. 'Thinks' or 'considers' are preferable in the first two examples and 'construed' or 'interpreted' in the third...Deeming' creates an artif....
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....ontroller of Estate Duty. 28. To sum up, whenever word 'deemed' is used in the statute in relation to a person or thing, it implies that the legislature after due consideration exercised their judgment in conforming with the status attributed to a person or thing. These two synonyms of the word 'deemed' are to be adjudged accordingly. 29. In view of above submission of Shri J.D.Mistri learned Senior Counsel that because of the word used in sub-section 4 to the effect that "only on the question so formulated" court lacks jurisdiction to formulate new question under the power conferred by the proviso seems to be not correct. INTERPRETATION 30. The second argument of the learned Senior Counsel that proviso may not be enlarged the main provision as contained in sub-section 4 seems also to be misconceived argument. Once the proviso itself empowers the court to formulate another substantial question of law or new substantial question of law, in case, it is satisfied and power vested in court cannot be abridged away because of subsection 4 section 260 A, such argument seems to be not sustainable. Language of the proviso as well as entire Section 260 A does not suffer from any ....
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....e court could have escaped from framing of substantial question of law touching root of the matter. Miscarriage of justice may cause because of nonframing of some substantial question of law. To deal with such situation, legislature to their wisdom had empowered the court to formulate additional substantial question of law, in case satisfied. As observed (supra) such power conferred to the court cannot be abridged or take away in view of proviso contained in Section 260 A (4) of the Act. Power conferred by the proviso is an exception and independent one. 37. Argument raised by Shri J.D.Mistri, that neither assessee nor appellant could advance argument to formulate new or additional substantial question of law, seems to be not sustainable. In case, during the course of hearing attention is invited by the appellant or the assessee with regard to certain important substantial question of law which has not been taken into account or escaped or has not been formulated for any other just reason court is vested with power to correct itself and formulate new or additional substantial question of law in case it is satisfied. Needless to say that power conferred to the court is judicious ....
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....war Prasad Vs. State of Bihar, MLJ :QD (1956-1960) Vol. IV C2138: 1956 BLJRT 24 : AIR 1956 Pat 104.[Bihar Land Reforms Act (30 of 1950), S. 4(h)] The word 'satisfied' in S. 4(h) must be construed to mean 'reasonably satisfied', and, therefore, the finding of the collector under S. 4(h) cannot be a subjective or arbitrary finding but must be based upon adequate material. The satisfaction of the collector under S. 4 (h) is not capricious satisfaction but must be capable of being tested in an objective manner. Chandreshwari Prasad Narain Deo vs. State of Bihar, AIR 1956 Pat 104, 107. [Bihar Land Reforms Act (30 of 1950), S. 4(h)] The phrase 'satisfied' occurs in many taxing statutes and is a familiar one for a great many years. The phrase "is satisfied" means, simply "makes up it mind." 1977 Tax LR 1921 (DB) (Del)." 39. In view of above, keeping in view the meaning of word "satisfaction" or "satisfied", after assigning reason court may formulate new substantial question of law, if it is necessary under the peculiar facts and circumstances of particular case after assigning reason. 40. Non-exercise of discretion by the court may be resulted into miscarriage of justice, hence, ....
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....e courts power that in case while formulating the substantial question at original stage if courts escaped to formulate another question and attention of the court invited to that effect, court has option to frame a new substantial question of law for the reasons to be recorded. However, Hon'ble Single Judge of Madras High Court had not considered the provision contained in Section 100 of the Code of Civil Procedure in its totality as discussed in the preceding para. 45. Substantial question of law is to be determined and formulated by the Court keeping in view the overall material and evidence on record. In (2011) 1 SCC 673, Vijay Kumar Talwar Vs. Commissioner of Income Tax, Delhi, their Lordships defined the substantial question of law as under:- "A finding of fact may give rise to a substantial question of law, inter alia, in the event the findings are based on no evidence and/or while arriving at the said finding, relevant admissible evidence has not been taken into consideration or inadmissible evidence has been taken into consideration or legal principles have not been applied in appreciating the evidence, or when the evidence has been misread. (See Madan Lal Vs. Gop....