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Corporate taxation lawyer: the High Court can decide the appeal under section 260 of Income Tax Act only on substantial question of law, which is essentially has to be answered; matter remanded back.

Supreme Court of  India

Justice Abhay Manohar Sapre

In the case titled as "Principal CIT Versus AA Estate Private Limited", the Supreme Court of India has allowed the Appeal of the revenue only on the ground that the high court had not framed any substantial question of law before deciding the appeal under section 260 of the act.

In the present case the proceedings under section 148 of the Income Tax Act was instituted against the assessee for reopening of the assessment, to which the assessee filed its objections, finally as the high court had decided the case in favour of the assessee the revenue filed the appeal before the Supreme Court of India.

In the present case the order of High Court was set aside, only on the ground as no substantial question of law was framed as stipulated under section 260-A of the act. The Supreme Court of India further held that the question of law proposed is different; and questions framed by the high court under Section 260-A are different, which are to be decided while deciding the appeal, and those questions framed by the court are to be answered while deciding appeal. The matter was remanded back to the high court to frame the substantial questions of law and decide the matter afresh.


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