Understanding High Court Appeal under Income Tax with latest case laws

The Finance (No. 2) Act, 1998 has given a go by to the procedure of Reference Application provided u/s.256 to u/s.260(1) from 1-10-1998. It has inserted new S. 260A providing a direct appeal against any order passed in appeal by the Appellate Tribunal after 1-10-1998. The legislative intent as per the notes on clauses [231 ITR St. 175 (207)] and Memorandum explaining the provisions of the Finance Bill (No. 2), 1998 [231 ITR St. 228 (246)] is to simplify the existing reference application procedure. There is a reference in the Memorandum explaining the provisions to the observations of Karnataka High Court in the case of CIT v. Wandoor Jupiter Chits (P) Ltd., 213 ITR 73 Kar., wherein, it was observed that the procedure for making reference application u/s.256(1) and u/s.256(2) is very cumbersome, complicated and time-consuming which causes unavoidable delay in delivering justice. We hope the above mentioned vices will not creep into the new provisions. The new provisions, their intent and scope have been analysed hereunder in a manner to benefit Chartered Accountants to advise their clients whether to prefer an appeal to the High Court or not.

I.	Provisions : Chapter XX contains subtitle 'Appeals to High Court', which contains S. 260A and S. 260B. The newly inserted S. 260A came into effect from 1-10-1998.
II.	Procedure : The major distinguishing feature of the new Appeal provisions vis-à-vis reference proceedings is, it has shortened the lengthy procedure to approach the High Court against an order of Appellate Tribunal on a question of law. S. 260A(1) provides that an appeal shall lie to High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law. The Appeal is heard at two stages, first, admission to consider whether the issue involved in appeal is a substantial question of law or not. Second, final hearing when the appeal is finally disposed of. In the earlier reference procedure where the reference application was filed before the Appellate Tribunal, the proceedings were deemed to be pending before the Appellate Tribunal until the High Court's order was given effect to u/s. 260(1). The Appeals are initially placed before the High Court for admission. The appellant is supposed to convince the Court that the issue involved in the appeal gives rise to 'Substantial question of law'. The Court gives an opportunity to the respondent to oppose the admission of the appeal. This is a very good procedure followed by the Bombay High Court. The appellant is supposed to serve the other side before the matter comes up for admission. It is advisable, wherever the issue involved in the Appellate Tribunal's order is a point of law and the stakes involved are substantial, the assessee should file caveat before the High Court. The caveat will ensure that the assessee shall get an opportunity to represent the matter at the admission stage of the appeal as a matter of right.
III.	Limitation : The assessee or Commissioner can file an appeal against the Appellate Tribunal's order within 120 days from the date of receipt of the order.
IV.	Fees : Upto 1-6-1999 clause (b) of S. 260A(1) provided for filing appeal at a fee of Rs.10,000/-. The Finance Act, 1999 deleted clause (b) and it was clarified that the fees for filing appeal shall be governed by the provisions of Court Fees Act of the respective State where the appeal is filed. After the above amendment the High Court office insisted on payment of Court fee at ad valorem value, the maximum being Rs.75,000/-. As per another view, after amendment, the Court fees payable on an appeal u/s.260A is Rs.10/- only. This view was canvassed before the Court. The State Government took note of the anomalous situation and issued ordinance dated 3-3-2000 inserting Entries 16A and 16B to Schedule I of the Bombay Court Fees Act, 1959. Entry 16A provides that in case of Appeal under Income-tax Act, 1961 ad valorem value of the tax in dispute shall be subject to maximum fees of Rs.10,000/-. Entry 16B provides for appeal under Wealth-tax Act, 1957 at ad valorem value of tax in dispute subject to maximum of Rs.5,000/-. The new Entries 16A and 16B in Schedule-I provide for Court fees on the basis of the 'tax in dispute'. The Court fees payable in an appeal, where the amount disputed is penalty, interest, etc., is Rs.100/- i.e. the minimum. Entry 16 which provides for Court fees payable in an application u/s.256(2) protects the Department from payment of any Court fees. This protection for the Department has been denied in Entries 16A and 16B of Schedule-I to Bombay Court Fees Act, 1959. The Department is also supposed to pay court fees.
	A few instances of Court fees determined on the basis of tax amount in dispute are given below, which should be helpful to the readers to know the impact of Court fees to prefer an appeal. Tax amount in dispute (Rs.) Court fees Rs.   10,000.00    785.00   50,000.00  3,859.00 1,00,000.00  5,950.00 2,00,000.00  7,950.00 3,00,000.00  9,950.00 4,00,000.00 10,000.00
	If tax in dispute is more than Rs.4,00,000/- then the Court fees shall be payable at maximum, where appeal is filed under Income-tax Act, 1961.
V.	Appealable orders S. 260A provides that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal. Thus, there is no ambiguity as far as the orders passed u/s.254(1) of the Act are concerned. It is a mute question whether appeal lies against an order passed by the Appellate Tribunal u/s.254(2) or not. Similar kind of controversy arose under reference proceedings also. S. 256(1) provided that the assessee or the commissioner may prefer an application against an order passed u/s.254. The Section did not specify the sub-sections. Under the 1922 Act the Courts expressed the view that reference application against the rectification order is not permissible. However, under 1961 Act the Karnataka High Court in the case of Jai Bharat Enterprises v. CIT, (1988) 173 ITR 132 observed that an application U/ss.(1) or U/ss.(2) of S. 256 lies only with reference to an order made by the Appellate Tribunal U/ss.(1) of S. 254. If such an order is amended on an application made by the party U/ss.(2) of S. 254, then the order, as amended, substitutes the earlier order made U/ss.(1) and becomes an order u/s.254(1) and subsequently a reference application either U/ss.(1) or U/ss.(2) of S. 256 lies with reference to such amended order. But in a case where a miscellaneous application for rectification of the order made u/s.254(2) is rejected by the Tribunal, the result would be that the order made u/s.254(1) remains undisturbed and reference application would have to be made only with reference to such order. No question of law arises out of an order rejecting an application made u/s.254(2). Under the new provisions of S. 260A also, the above mentioned position of law shall prevail. The same reasoning can be applied with respect to the amending order passed u/s.254(2) after 1-10-1998. However, the assessee used to prefer Writ Petition under Article 226 of the constitution against an order rejecting the application u/s.254(2) on the ground that there is no alternative remedy available to him. Here it would be worthwhile to mention that the Madras High Court in the case of Sri Balasubramania Traders v. ACIT, 240 ITR 49 held that Writ Petition against an order passed in blatant breach of principles of natural justice is maintainable.
VI.	Question of law v. Substantial question of law : Ss.(1) to S. 260A provides that an appeal shall lie to the High Court against an order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law. In earlier provisions of reference U/ss.(1) and U/ss.(2) of S. 256 the reference was granted on a question of law. The expression 'substantial question of law' is not defined under the Act. This term is used in S. 100 of the CPC. According to the law laid down by the decisions of the Supreme Court any question of law which has bearing on the rights of the parties is a substantial question of law. The Full Bench of the Calcutta High Court in the case of Ratanlal v. Satya Narain, AIR 1993 (Cal.) 144 considered the scope of S. 100 of CPC and explained that the Apex Court in the case of Mahindra & Mahindra Ltd. v. UOI, AIR 1979 SC 798 (3 Judge Bench) and Chunilal Mehta & Sons Ltd. v. Century Spinning & Manufacturing Co. Ltd., AIR 1962 SC 1314 (5 Judge Bench) meant that the test is whether it is of general public importance, or whether directly or substantially affects the rights of the parties or whether the question is still open, i.e. it is not finally settled by Supreme Court, Federal Court or Privy Council. The Rajasthan High Court in the case of DCIT v. Marudhar Hotel (P) Ltd., 107 Taxman 453 (Raj.) has observed that it is not necessary that all questions of law are substantial questions of law. In a recent decision the Kerala High Court in the case of M. Pappu Pillai v. ITO, 243 ITR 726 considered the Apex Court's decision in Chunilal Mehta & Sons Ltd. v. Century Spinning and Mfg. Co. Ltd., (supra) and held that the principles laid down in the said decision are applicable to appeal u/s.260A with respect to substantial question of law. The proviso to Ss.(4) further provides that the Court's discretion shall not be restricted by the substantial questions of law formulated at the stage of admission. It can formulate new substantial question of law if it deems fit. The most important provisions of the new appeal provisions are in Ss.(6), which provides that the High Court may determine any issue which has not been determined or has been wrongly determined by the Appellate Tribunal. The analysis of the above mentioned provision leaves no doubt that the appeal provisions in S. 260A have narrowed down the scope of litigation by mentioning 'substantial question of law', but at the same time have vested wider discretion and power in the High Court unlike Reference proceedings, where the High Court had only advisory jurisdiction.
VII.	Format of an appeal : Ss.(7) to S. 260A was inserted by Finance Act, 1999, which provides that the provisions of the Code of Civil Procedure, 1968 relating to appeals to High Court shall apply in the case of appeals under this Section. Thus, as per Rule 877 of Bombay High Court original side Rules the Memorandum of Appeal should be in Form 90. Practice Note 7 issued by the Prothonotary and Senior Master of the Bombay High Court gives the list of documents which should be enclosed to an appeal [236 ITR (St.) 249].
VIII.	Drafting of petition : The provisions of appeal being new, there is no straight jet formula. The Appeal is drafted more or less on the lines of Reference Application u/s.256(2). But, while drafting the Appeal care should be taken to annex all the documents and material produced before the Appellate Tribunal. Firstly, this will save the assessee from the cumber-some procedure to file separate Paper Book as per the High Court original Side Rules. Rules 888 to 903 of the original side Rules contain provisions with respect to filing the Paper Book. Secondly, if the relevant documents are readily available to the Court, it will save valuable time of the Court to determine whether a substantial question of law is involved in the matter before the High Court or not.
IX.	Power of the High Court under new appeal provisions : The new appeal provisions have brought a material difference, as far as the jurisdiction of the High Court is concerned. Under the reference provisions provided u/s.256 to u/s.260(1), the High Court is exercising its advisory jurisdiction. The language of S. 256(1) and (2) was such that the High Court could not have travelled beyond the order of the Appellate Tribunal passed u/s.254 and the statement of case prepared by it. The High Court has wider discretion under the new appeal provisions. Ss.(6) to S. 260A has enlarged the jurisdiction of the High Court substantially. The High Court can consider certain issues which were either not determined by the Appellate Tribunal or were wrongly determined. Under the new appeal provisions, as a practice, High Court may not interfere with a finding of fact, but has got all the power to consider any issue on facts also. The Bombay High Court in the matter of Hatcheries P. Ltd., ITA No. 80 of 1999 has set aside the Appellate Tribunal to dispose of the appeal before it afresh. In another matter the High Court has set aside the Appellate Tribunal order and restored the matter back to the Assessing Officer's file. The High Court has got power to award costs also.
X.	Effect to the order of the High Court : Ss.(1A) to S. 260 provides that the Assessing Officer shall give effect to the judgement delivered by the High Court in an appeal filed u/s.260A.
XI.	Stay of demand : Under new appeal provisions the pendency of an appeal before the High Court shall not amount to any proceedings pending before Appellate Tribunal. Therefore, pending appeal before the High Court the assessee will have to approach the High Court to stay the demand by filing a notice of motion.

Now let us understand the procedure of making appeal at high court with latest case laws:

 

·         Question of law: Appeal only on substantial question of law. Refer, the following cases laws in this respect.

 

(a)  Deputy CIT v. Sulabh International Social Service Organisation, 350 ITR 189.

(b)  An appeal under section 260A of the Income–tax Act 1961, will lie before the High Court if the appellant is able to satisfy the Court that it involves a substantial question of law. In order to be substantial, a question of law must be debatable, not previously settled under the law of the land or binding precedent, and must have a material bearing on the decision of the case, if answered either way ,in so far as the rights of the parties before it are concerned. The High Court in exercise of its second appellate jurisdiction should normally accept all findings of facts recorded by the first appellate court, being form of facts. Adequacy of materials or possibilities of another view on facts, is no ground for High Court to entertain a second appeal. The High Court can on facts interfere only after it reaches the conclusion that, in view of the materials on record , no person duly instructed in law can reach that conclusion. Refer, Dy. CIT v. Sulabh International Social Service Organisation, 350 ITR 189.

(c)  Dr. Gurvinder Singh Randhawa v . CIT, 352 ITR 616

(d)  CIT v . Mitsu Pvt. Ltd . (SC), 354 ITR 89.

(e)  CIT v. Hiraben Govindbhai Patel, 362 ITR 59.

(f)   A pure question of law can be allowed to be raised by amendment to the appeal memo if the facts on which Tribunal has given its decision are not disputed. Refer, CIT vs. Jindal Equipments and Leasing & Consultancy Services Ltd., 37 DTR 172.

(g)  All the authorities below, in particular the Tribunal, having observed in unison that the assessee did not  produce any evidence to rebut the presumption drawn against him under section 68 by producing the  parties in whose names the impugned amounts were credited in assessee’s books of account, the  conclusion of the Tribunal to the effect that the assessee has failed to prove the source of the cash credits  cannot be said to be perverse, giving rise to a substantial question of law and therefore, no interference is warranted. Refer, Vijay Kumar Talwar vs. CIT, 48 DTR 174 (SC). C

(h)  Utkal Road Lines v. Registrar, Income-tax Appellate Tribunal (Orissa), 336 ITR  149.

 

·         Circular issued u/s 268A: Circulars or instructions issued u/s. 268A by the CBDT are applicable not only to new cases but to pending cases as well; in view of instruction No.3 of 2011, dated 9th Feb. 2011, appeals were not maintainable. Refer, CIT v. Vijay V. Kavekar, 253 CTR 481.  

 

Further case laws justifying the same is given below.

 

(a)  CIT v. Ranka and Ranka, 352 ITR 121.

 

·         Tax Monetary limit : Tax effect of the instant appeal filed by the revenue was less than the there shold monetary limit for filing of appeal by the Revenue as prescribed by Instruction No.F.279/126/98-ITJ, dated 27th March 2000 and the instruction No.2 of 2005 dated 24th Oct. 2005 and no questions of general importance are involved and therefore appeal is dismissed. Refer, CIT v. S. Akbar Shah, 253 CTR524. 

 

Further, same was also confirmed in the case of CIT v . Smt. Varsha Dilip Kolhe, 350 ITR 384, where as per Instruction No. 3 of 2011 issued by CBDT there is no appeal if tax effect is less than ten lakhs of rupees and hence  penalty appeal is not maintenable.

 

 Case laws justifying the same is given below:

(a)  ITO v . Ramdas Alva, 351 ITR 471.

(b)  CIT (International Taxation) v . Igate Global Solutions Ltd . (Karn), 354 ITR 1.

(c)  CIT v . Jugal Kishore Mahanta (Gauhati), 355 ITR 432.

(d)  CIT v. Sureshchandra Durgaprasad Khatod (HUF) (Guj), 363 ITR 556.

(e)  CIT v. Dawoodi Bohra Jamat, 364 ITR 31.

(f)   Circular dated 15.5.2008 laying down monetary limit controls the filing of the appeals and not their  hearing. Appeals filed as per applicable limit at the time of filing cannot be governed by circular  applicable at the time of hearing. The object of the Circular u/s 268A is only to govern monetary limit for  filing of the appeals. There is no scope for reading. Refer, CIT vs. Varinder Construction Co, 51 DTR 290.

(g)  The Department filed an appeal in the year 2008 where the tax effect was less than Rs. 10 lakhs. The  question arose whether in view of Instruction No. 3/2011 Dated 9-2-2011 the appeal was maintainable.  HELD dismissing the appeal:

In view of CIT vs. P. S. Jain & Co. which followed Pithwa Engineering 276 ITR 519 (Bom.) & Ashok Patel 317 ITR 386 (MP) and where it was held that the CBDT Circular imposing limits on the filing of appeals by the department applied to pending appeals, Instruction No. 3/2011 Dated 9-2-2011 also applied to pending appeals and as the tax effect was less than Rs. 10 lakhs, the appeal was not  maintainable. Refer, CIT vs. Delhi Race Club Ltd, Delhi High Court.  

(h)   The High Court, relying on CBDT’s Instruction No. 3/2011 dated 9‐2‐2011, dismissed the  department’s appeal as not maintainable on the ground that the tax effect was less than Rs.  10 lakhs. The department filed a SLP in the Supreme Court. The Apex court allowing the  petition held that, Liberty is given to the Department to move the High Court pointing out  that the Circular dated 9th February, 2011, should not be applied ipso facto, particularly,  when the matter has a cascading effect. There are cases under the Income – Tax Act, 1961, in  which a common principle may be involved in subsequent group of matters or large number  of matters. The High Court shall not apply the Circular ipso facto. For that purpose, liberty  was granted to the Department to move the High Court in two weeks.   Refer, CIT v Surya Herbal Lt, 60 DTR 165 (SC).  

(i)    In the case of CIT v. B. Suresh Baliga, 364 ITR 560, eventhough the case was below the monetary limit, since the issue was repetitive, same ha been considered.

(j)    CIT v. Sureshchandra Durgaprasad Khatod (HUF), Gujrat High Court.

 

·         Condone the delay : On the date when the appeal was dismissed on the ground of limitation, there was no discretion with the Court to condone the delay. A discretion has come to the court by virtue of the amendment by inserting sec. 260A(2A). The appeal was rightly dismissed as per the then law and the subsequent amendment is not applicable as the matter has already attained finality. Refer, Jay Batra Roy (J.B.Roy) v. Dy.CIT, Review Petition No.10 of 2011 in ITA No. 127 of 2006 dated 7/9/2012, BCAJ Pg. 34, Vol. 44-B Part 2, November 2012(All) (High Court).

 

Case laws justifying the same is given below:

 

(a)  ACIT Vs Subhash Traders, 318 ITR 402.

(b)  CIT V Grasim Industries Limited, 154 ITR 319.

(c)  In view of the amendment of the Act, giving power to the High Court to condone the delay in filing appeals, liberty is given to the department to move the High court by way of review of the impugned order dismissing department’s belated appeal on the ground that it has no power to condone the delay. Refer, CIT vs. ICICI Bank Ltd, 38 DTR 319.

(d)  For condonation of delay in filing of appeal cannot be made under limitation act, Shergarh Co Op Limited & S Society Limited V ITO, 324 ITR 408.

(e)  The High Court dismissed the department’s appeal on the ground of delay. On appeal to Supreme Court, the Court held that looking to the amount of tax involved in this case, we are of the view that the High Court ought to have decided the matter on merits. The Court further observed that in all such cases where there is delay on the part of the department, we request the High Court to consider imposing costs but certainly it should examine the cases on merits and should not dispose of cases merely on the ground of delay, particularly when huge stake is involved. Refer, CIT vs. West Bengal Infrastructure Development Finance Corp., 8 Taxmann.com 258  SC.

(f)   CIT v R K B K Limited, 331 ITR 269

(g)  It is manifest from a bare reading of section 260A of the Income Tax Act, 1961, that an appeal to High  Court from a decision of the Tribunal lies only when a substantial question of law is involved, and where  the High Court comes to the conclusion that a substantial question of law arises from the order of  Tribunal, it is mandatory that such questions must be formulated. 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 evidence has been taken into consideration or legal principles have  not been applied in appreciating the evidence, or when the evidence has been misread. On the facts the Tribunal has given a finding that the assessee has failed to prove the source of cash credit satisfactorily hence, the no question of law arise from the order. Vijay Kumar Talwar vs. CIT, 330 ITR 1 (SC).  

(h)  Long Delay due to procedural reasons in filing Dept appeals cannot be condoned  The department filed a SLP challenging the order of the Bombay High Court declining to condone delay of 656 days in filing the appeal. The delay was explained as having been caused by “several facts such as non traceability of case records, procedural formalities involved in the Department and the papers are to be processed through different officers in rank for their comments, approval etc. and then the preparation of the draft of appeal memo, paper book and the administrative difficulties such as shortage of staff“. HELD dismissing the SLP. Refer, CIT vs. Indian Hotels Co Ltd (Supreme Court),

(i)    CIT v. Williamson Tea (Assam) Ltd. (Gauhati), 346 ITR 428.

(j)    DIT v. Citibank N.A., SC.

 

·         Additional question of law: High Court has power to frame additional question of law during hearing. Refer, CIT v . Indo Gulf Fertilizers Ltd., 355 ITR 437.

 

Case laws justifying the same is given below:

 

(a)  CIT v. Mastek Ltd, 358 ITR 252.

(b)  CIT v. Engineers India Ltd, 364 ITR 686.

 

·         Procedural: Plea not raised before Commissioner or Tribunal cannot be raised before High Court for the first time. Refer, Kandi Friends Educational Trust v. CIT, 357 ITR 84.  

 

The non consideration of a ground by itself could not be a reason for filing an appeal. The revenue could  have approached the Tribunal pointing out the mistake in not onsidering the specific ground raised by the Revenue and obtained an order by rectification. Appeal was dismissed. Refer, CIT vs. Malladi Project Management P. Ltd, 324 ITR 87.   

 

If the revenue has not challenged the order of CIT(A) for assessment year and thus accepted the  view of the CIT(A), then on principles of consistency it is not open to the revenue to challenge the similar  findings in respect of earlier year. Refer, CIT vs. Prakash Industries Ltd, 40 DTR 20.

 

In view of the importance and recurring nature of issue and the reference being made by Division Bench doubting the correctness of judgment pending in appeal before the Supreme court, the court can proceed to hear the case instead of deferring the same. Refer, CIT v South Indian Bank Ltd, 233 CTR (Ker) (FB) 214.

 

Appellant being the Income tax Department, and the respondent being a State owned corporation ,before  filing an appeal against the department ,the appellant ought to have obtained clearance from the  Committee on Disputes, since this has not been done ,the appeal was not maintainable.  Refer, CIT v Tamil Nadu Industrial Investment Corporation Ltd, 327 ITR 68.   

 

Whether Circular issued in the year 2008 will have retrospective effect for pending appeals and references matter referred to larger bench. Refer, CIT vs. Varindra Construction Co, 328 ITR 446.  

 

One appeal in respect of common order is maintainable however Court fee will be payable in   respect of each appeal. Refer, Director Income tax (International) vTransocean Offshore International Ventures Ltd, 336 ITR 637.

 

The court held that , even where a reference of a question of law is made to the High Court in its  advisory jurisdiction , and not the appellate jurisdiction , where normally the findings of fact recorded by  the Tribunal are binding on the High Court , the finding are not binding on the High Court , if they are  perverse or if the findings are such that no person acting judicially and properly instructed as the relevant law could have come to the determination under appeal. The position in an appeal under section 260A of the Income-tax Act ,1961 is “a fortiori”. Refer, CIT v. Nova Promoters and Finlease (P) Ltd, 342 ITR 169.

 

In an appeal filed by the department against the order of Tribunal , the High Court set aside the order of  Tribunal , without hearing the assessee. The Apex court held that the assessee must be heard and it is the  duty of the High Court to pass the reasoned order. Accordingly the order of High Court was set aside  to decide de novo. Refer, Rajesh Mahajanv.CIT, 249 CTR 28 (SC).

 

Liberty is given to the Department to move the High Court pointing out that the Circular dated 9th February, 2011, should not be applied ipso facto, particularly, when the matter has a cascading effect. There are cases under the Income Tax Act, 1961, in which a common principle may be involved in subsequent group of matters or large number of matters. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the Circular ipso facto (Surya Herbal reiterated)(A.Y. 1987-88) ( C.C  21465 /2011 dated 2-7-2012, from the  Judgement order dated 26-4-2011 ITA no 6 /1995). Refer, CIT v. Atma Ram Properties Pvt. Ltd , SC.  

 

·         Jurisdiction: Under section 20 of the Code of Civil Procedure, 1908, suits are to be instituted, where the defendants  reside or where a cause of action, wholly or in part, arises. An appeal is nothing but an extension of a  suit. Hence, a place where the cause of action, wholly or in part, arises, is the legal venue for institution of an appeal under the Act. Held, dismissing the appeals, that the orders challenged in this  set of appeals had been passed within the local limits of the territorial jurisdiction of the court and,  hence, the court had the jurisdiction to try the appeals  . Refer, CIT v. Shree Ganapati Rolling Mills P. Ltd., 356 ITR 586.  

 

Order passed by Tribunal in Chennai, and subsequent shifting of assesse’s office to Punjab. Punjab and Haryana High Court has no jurisdiction to consider appeal. Refer, CIT v H.F.C.L.Infotel Ltd, 326 ITR 167. 

 

Similarly, Punjab and Haryana High court has no territorial jurisdiction to entertain an appeal arising out of an order passed by the assessing officer at Bangalore, though the registered office is shifted to Punjab. Refer, CIT v Motorala India Ltd, 326 ITR 156. 

 

 

 

 

·         Fresh evidence: Assessee filed certain documents before Supreme Court for the first time which are some relevance  and are required to be looked in to by the High Court for deciding the appeal . Accordingly the order  of High Court was seta side and the matter remanded back to the High Court for fresh disposal of the  appeal after accepting the documents filed by the assessee . Refer, Tek Ram (Dead) Through LRs v. CIT, 262 CTR 118.

 

·         Rectification: High Court has inherent power to review its decision. Procedure laid down in section 260A must be  followed strictly. In the event of failure to formulate substantial question of law, the error ought to be rectified. Refer, Meghalaya Steels Ltd. .v. CIT, 358 ITR 551.   

 

High court has not only the power but a duty to correct any apparent error in respect of any order passed  by it. High Court can entertain the application for review arising out of a judgment passed under section  260A. Refer, D. N. Singh vs. CIT, 45 DTR 259.

 

Even though the order of the Special Bench of the Tribunal relating to earlier assessment years was not  assailed in appeal by the Department itself, it does not take away the right of the Revenue to question  the correctness of the assessment order on the same issue in the relevant assessment year, particularly  when a question of law is involved which goes to the very root of the matter. Refer, Catholic Syrian Bank Ltd. v. CIT, 3 SCC 784(SC)

 

·         New grounds: New ground not raised before Tribunal cannot be raised before High Court. Refer, CIT v. Jayshree Gems and Jewellery, 362 ITR 272.

 

Case laws justifying the same is given below:

 

(a)  S. Muthukumar v. ITO, 363 ITR 161.

(b)    CIT vs. Chand Ratan Bagri, 36 DTR 244

(c)  CIT v Vijay Enterprises, Tax .L.R.497.9

(d)  Alok Todi v. CIT (Cal), 339 ITR 102

(e)  C& C Construction Pvt Ltd vs. CIT, Delhi HC

 

·         Adjournment/ exparte: High Court lays down zero-tolerance policy over  adjournments-Appeal may be dismissed, hear them ex-parte or and/or impose costs if counsel  are not prepared. Refer, Thermax Babcock & Wilcox Ltd. .v. CIT.