The Delhi High Court while ruling in respect of maintainability of cross-objections in second appeal under Section 260A of the Income Tax Act held that in case the objection be indelibly coupled to the main question, there would be no legal requirement of preferring cross-objections separately.
The bench of Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar has held that absent a specific adoption of a right to prefer cross-objections and the same being statutorily acknowledged to be part of the appeal procedure laid out in Section 260A of the Income Tax Act, a cross-objection would not be maintainable. Section 260A(6) is merely an enabling provision and which empowers a assessee to agitate an issue that may have been decided against it by the Tribunal subject to the condition that the same is indelibly connected with the decision which gives rise to the question of law on which we admit an appeal.
The bench stated that provision under Section 260A cannot be construed as conferring an independent right to raise a challenge divorced or isolated from the question on which the appeal comes to be admitted.
The appeals were filed by the Income Tax Department. In the course of that search, the appellants are stated to have also seized documents and material from the premises of M/s AIMS Promoters Pvt. Ltd. relating to the respondent-assessee.
It is this which led to the initiation of proceedings referable to Section 153C of the Income Tax Act.
The department argued that the cross-objections would not be maintainable in light of Section 260A of the Act neither envisaging nor creating such a remedy. Section 260A is a remedy of redressal before the High Court in respect of an order passed by the Tribunal provided a substantial question of law arises. The provision itself enables the Income Tax Department or an assessee to institute such an appeal against an order of the Tribunal and the same being liable to be entertained only if it were to give rise to a substantial question of law.
The assessee contended that Section 260A of the Income Tax Act should not be conferred an interpretation which deprives the assessee of such a right especially when some High Courts have held that a cross-objection would be maintainable even at the second appeal stage and to which the provisions of the Code would apply.
The Court upheld the objection of the appellant/departmnet on the point of maintainability. The cross- objections were held to be not maintainable and thus dismissed.
Case Details
Case Title: PCIT Versus Nagar Dairy Pvt. Ltd.
Case No.: ITA 320/2023
Date: 03/03/2025
Counsel For Appellant: Sanjay Kumar
Counsel For Respondent: Ved Jain
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