PR. COMMISSIONER OF INCOME TAX CENTRAL 2 versus M/S A.A. ESTATE PVT. LTD.

Citation: [2019] 6 S.C.R. 188 · Decided: 16-04-2019 · Supreme Court of India · Bench: ABHAY MANOHAR SAPRE
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 6 S.C.R.
PR. COMMISSIONER OF INCOME TAX CENTRAL 2
v.
M/S A.A. ESTATE PVT. LTD.
(Civil Appeal No. 3968 of 2019)
APRIL 16, 2019
[ABHAY MANOHAR SAPRE AND
DINESH MAHESHWARI, JJ.]
Income Tax Act, 1961: ss. 260-A, 260-A(3), 260-A(4) – Appeal
to High Court – Formulation of substantial question of law – On
facts, non-formulation of any substantial question of law by the
High Court as required to be framed u/s.260-A – Held: Questions
framed by the High Court were not as was required to be framed u/
s 260-A(3) for hearing the appeal but were the questions urged by
the appellant – There lies a distinction between the questions
proposed by the appellant for admission of the appeal and the
questions framed by the Court – Questions, which are proposed by
the appellant, fall u/s 260-A(2)(c) whereas the questions framed by
the High Court fall u/s 260-A(3) – Appeal is heard on merits only
on the questions framed by the High Court u/s. 260-A(3) as provided
u/s. 260-A (4) – Further, if the High Court was of the view that the
appeal did not involve any substantial question of law, it should
have recorded a categorical finding to that effect and dismissed the
appeal in limine – However, the High Court without admitting the
appeal and framing any question of law, issued notice of appeal to
the assessee, heard both the parties on the questions urged by the
appellant and dismissed it – Thus, the High Court did not decide
the appeal in conformity with the mandatory procedure prescribed
in s.260-A – High Court should have seen that the substantial
questions of law did arise in the appeal for being answered on
their respective merits – Matter remanded to the High Court to answer
the questions framed by this Court u/s. 260-A(3) of the Act.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3968
of 2019.
From the Judgment and Order dated  09.01.2017 of the High
Court of Judicature at Bombay in Income Tax Appeal No. 1239 of 2014.
   [2019] 6 S.C.R. 188
188
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H. R. Rao, P. V. Yogeswaran, Mrs.Anil Katiyar,  Advs. for the
Appellant.
Salil Kapoor, Sumit Lalchandani, Praveen Swarup, Advs. for the
Respondent.
The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J.
1. Leave granted.
2. This appeal is filed against the final judgment and order dated
09.01.2017 passed by the High Court of judicature at Bombay in ITA
No.1239 of 2014 whereby the High Court dismissed the appeal of the
Revenue-Commissioner of Income Tax-Mumbai(appellant herein).
3. A few facts need mention hereinbelow for the disposal of this
appeal, which involves a short point.
4. The appellant is the Revenue-Commissioner of Income Tax,
Mumbai, whereas the respondent is an assessee.
5. The respondent-assessee is a Company engaged in the business
of development and building of properties. The dispute relates to the
assessment year 2008-09.
6. On 24.12.2009, the Assessing Officer (for short, “the AO”)
completed the assessment under Section 143(3) read with Section 153A
of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) and
determined the total income at Rs.7,77,49,790/-.
7. On 22.09.2010, the AO issued a notice under Section 148 of
the Act seeking therein to re-open the assessment of the respondent-
assessee which was made on 24.12.2009. This notice was issued by the
AO on the basis of information received from ADIT (investigation)
Unit II (2).
8. By this notice, the AO proposed to make an addition of
Rs.1,70,94,000/- towards unaccounted sale proceeds alleged to have
been made by the respondent-assessee in the assessment year in question
(2008-2009) because, in his opinion, it was in the nature of escaped
assessment.
9. The AO proposed this addition on the basis of one document
(Annexure–AB-1), which was seized by the Revenue Department in
PR. COMMISSIONER OF INCOME TAX CENTRAL 2 v.
M/S A.A. ESTATE PVT. LTD.
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SUPREME COURT REPORTS
[2019] 6 S.C.R.
their search operation carried on 30.11.2007 in the business premises of
another assessee by name-M/s Ashok Buildcom Ltd.
10. In other words, the foundation for issuance of notice under
Section 148 of the Act to the respondent-assessee for adding the
aforementioned sum was the document-Annexure-AB-1.
11. The respondent-assessee objected to issuance of notice
contending inter alia that first, there is no factual foundation for issue of
notice; Second, there is no case for any “escaped assessment”, and
Third, there is no case to “reason to beli
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