Summary
The Supreme Court remanded a Revenue appeal because the High Court had heard and dismissed it without formally admitting it or framing substantial questions of law under Section 260-A. Reproducing questions urged by the appellant did not satisfy the Court’s independent obligation. The Supreme Court identified three substantial questions concerning reopening, escaped assessment and the use of a document seized from another assessee, directing fresh adjudication without expressing any view on those questions’ merits.
Issues
- Whether reproducing the appellant’s proposed questions satisfied Section 260-A.
- Which substantial questions required decision on remand.
Held
- Questions proposed in the memorandum and questions formulated by the High Court occupy distinct statutory stages. Merits adjudication must address formulated substantial questions, while a refusal of admission requires a categorical finding that no such question arises. (¶ 19–26)
- Notice and a hearing on the appellant’s proposed questions did not cure the failure to admit the appeal and formulate questions. The respondent’s statutory right to contest the framed questions presupposed proper formulation. (¶ 23–26)
- Substantial questions arose concerning the relevance and sufficiency of the reopening reasons, whether escaped assessment was made out, and whether the presumption concerning a document seized from another assessee could support the proposed addition. (¶ 27)
- The High Court was to answer those three questions afresh on merits, uninfluenced by either the earlier decision or remand observations; the Supreme Court did not decide the validity of the reopening or addition. (¶ 28–30)
Result
Appeal allowed. High Court dismissal set aside and Revenue appeal remanded for fresh merits determination of the three substantial questions formulated by the Supreme Court.