REPORTABLE IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.1349 OF 2007 Maharaja Amrinder Singh .Appellant(s) VERSUS Commissioner of Wealth Tax .Respondent(s) WITH CIVIL APPEAL No.1350 OF 2007 JUDGMENT Abhay Manohar Sapre, J. 1) These appeals are filed against final judgment and orders dated 24.08.2004 passed by High Court of Punjab and Haryana at Chandigarh in Wealth Tax Appeal Nos. 10 & 11/2001 and 3,4 & 5/2002 respectively whereby High Court allowed appeals filed by Signature Not Verified Digitally signed by ASHA SUNDRIYAL Date: 2017.09.05 16:55:50 IST Reason: 1 Revenue (Commissioner of Wealth Tax) under Section 27-A of Wealth Tax Act, 1957 (hereinafter referred to as Act ) and set aside order dated 05.07.2011 passed by Income Tax Appellate Tribunal (hereinafter referred to as Tribunal ), Chandigarh Bench in W.T.A. No.11,12 & 13/Chandi/95 & C.O. No.37/Chandi/95 in W.T.A. No.11/Chandi/95 and order dated 13.06.2001 in W.T.A. Nos.213, 191 and 192/Chandi/94 and restored order of assessment passed by Assessing officer for levying penalty for entire period of delay in respect of Assessment Years 1981-82, 1982-83 and 1983-84. 2) Few facts need mention for disposal of appeals. 3) appellant is wealth tax assessee and is subjected to payment of Wealth Tax under Act. case pertains to Assessment Years 1981-82, 2 1982-83 and 1983-84. issue involved in these three assessment years was decided by Tribunal in favour of appellant (assessee) which gave rise to filing of appeals before High Court by Revenue under Section 27-A of Act questioning therein legality and correctness of orders of Tribunal. As mentioned above, High Court allowed appeals filed by Revenue, which has given rise to filing of these appeals by way of special leave before this Court by assessee. 4) short question, which arises for consideration in these appeals, is whether High Court was justified in allowing appeals filed by Revenue and thereby was justified in setting aside orders passed by Tribunal. 5) Having heard learned counsel for parties and on perusal of record of case, we are inclined to allow appeals and while setting aside of impugned orders of High Court 3 remand case to High Court for deciding appeals afresh on merits after formulating substantial questions of law, if it so arises in case. 6) Section 27 - of Wealth Tax Act reads as under 27-A Appeal to High Court. (1) assessee or Chief Commissioner or Commissioner may within one hundred twenty days of day upon which he is served with notice of order under section 24 or section 26 or clause (e) of sub-section (1) of section 35, file on or after 1st day of October, 1998 but before date of establishment of National Tax Tribunal appeal before High Court. (1A) High Court may admit appeal after expiry of period of one hundred and twenty days referred to in sub-section (1), if it is satisfied that there was sufficient cause for not filing same within that period. (2) appeal shall lie to High Court before date of establishment National Tax Tribunal from every order passed in appeal by Appellate Tribunal, under sub-section (1) of section 24 only if High Court is satisfied that case involves substantial question of law. (3) In appeal under this section, Memorandum of Appeal shall precisely state 4 substantial question of law involved in appeal. (4) Where High Court is satisfied that substantial question of law is involved in any case, it shall formulate that question. (5) appeal shall be heard only on question so formulated and respondent shall, at time of hearing of appeal, be allowed to argue that case does not involve such question: Provided that nothing in this sub-section shall be deemed to take away or abridge power of Court to hear, for reasons to be recorded, appeal on any other substantial question of law not formulated by it, if it is satisfied that case involves such question. (6) High Court shall decide question of law so formulated and deliver such judgment thereon containing grounds on which such decision is founded and may award such cost as it deems fit. (7) Assessing Officer shall give effect to order of High Court on basis of certified copy of judgment delivered under sub-section (6). (8) Provisions of Code of Civil Procedure, 1908 (5 of 1908) relating to appeals to High Court shall, so far as may be, apply in case of appeals under this section. 7) Section 27-A of Act, which provides remedy of appeal to High Court against order of Income Tax Appellate Tribunal, is 5 modeled on existing Section 100 of Code of Civil Procedure, 1908 (hereinafter referred to as Code ). Indeed, as would be clear, language of Section 27-A of Act and Section 100 of Code is identical. Both Sections are, therefore, in pari materia. It is case where Section 100 of Code is bodily lifted from Code and incorporated in Section 27-A of Act with minor additions and alterations by following principle of legislation by incorporation". 8) three Judge Bench of this Court in Santosh Hazari vs. Purushottam Tiwari (Deceased) by L.Rs., (2001) 3 SCC 179 had examined scope of Section 100 of Code of Civil procedure, 1908 (hereinafter referred to as Code ). Justice R.C. Lahoti (as His Lordship then was) speaking for Bench laid down following proposition of law in Para 9: 6 9. High Court cannot proceed to hear second appeal without formulating substantial question of law involved in appeal and if it does so it acts illegally and in abnegation or abdication of duty case on Court. existence of substantial question of law is sine qua non for exercise of jurisdiction under amended Section 100 of Code. (See Kshitish Chandra Purkait v. Santosh Kumar Purkait,(1997) 5 SCC 438 Panchugopal Barua v. Umesh Chandra Goswami, (1997) 4 SCC 413 and Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, (1999) 3 SCC 722.) 9) His Lordship then in Paras 10 to 14 succinctly explained meaning of words substantial question of law and question of law and held that in order to admit second appeal, what is required to be made out by appellant being sine qua non for exercise of powers under Section 100 of Code, is existence of substantial question of law arising in case so as to empower High Court to admit appeal for final hearing by formulating such question. In absence of any substantial question of law arising in appeal, same merits dismissal in limine on ground that 7 appeal does not involve any substantial question of law within meaning of Section 100 of Code. 10) In our considered opinion, interpretation made by this Court of Section 100 in Santosh Hazari s Case (supra), would equally apply to Section 27-A of Act because firstly, both Sections provide remedy of appeal to High Court; Secondly, both Sections are identically worded and in pari materia; Thirdly, Section 27-A is enacted by following principle of legislation by incorporation ; fourthly, Section 100 is bodily lifted from Code and incorporated as Section 27-A in Act; and lastly, since both Sections are akin to each other in all respects, appeal filed under Section 27-A of Act has to be decided like second appeal under Section 100 of Code. 11) Now coming to facts of case, we find that High Court proceeded to decide appeals 8 without formulating substantial question(s) of law. Indeed, High Court did not make any effort to find out as to whether appeals involved any substantial question(s) of law and, if so, which is/are that question(s) and nor it formulated such question(s), if in its opinion, really arose in appeals. High Court failed to see that it had jurisdiction to decide appeals only on question(s) so formulated and not beyond it. [Section 27(5)]. 12) In light of foregoing discussion and keeping in view law laid down in case of Santosh Hazari (supra), we are of considered view that impugned orders are not legally sustainable and thus liable to be set aside. 13) As result, appeals succeed and are allowed. Impugned orders are set aside. Both cases are remanded to High Court for deciding 9 appeals afresh in accordance with observations made above. ...................................J. [R.K. AGRAWAL] ... ..................................J. [ABHAY MANOHAR SAPRE] New Delhi; September 05, 2017 10 Maharaja Amrinder Singh v. Commissioner of Wealth-tax