The main legal point established in the judgment is that the law-of-the-case doctrine and the principle of res judicata apply in tax matters, preventing the court from reconsidering the framing of substantial questions of law that had been earlier refused.

JUDGMENT

Dama Seshadri Naidu, J. - Introduction:

The Revenue is the appellant in this tax appeal; it was dissatisfied with the order, dated 4 September 2014, of the Income Tax Appellate Tribunal. On 7 January 2016, this Court admitted the matter after framing two substantial questions of law. Then, the Revenue wanted this Court to frame a third substantial question of law on a specific issue. But, through a reasoned order, this Court refused.

2. When we took up the matter for final hearing, the Revenue filed a miscellaneous application. It again wanted us to frame "the same" or "similar" substantial question of law. According to it, this Court earlier refused to frame that substantial question of law, oblivious of the Supreme Court judgment on an identical issue.

3. Now the question before us is this: can we-a Bench of different composition but of the same strength, though-reconsider the issue, disregarding its earlier refusal, and frame a substantial question of law, afresh?

Facts:

4. The disputed tax is less than Rs. one crore. Suppose we confine ourselves to the two substantial questions of law already framed. In that case, we need not adjudicate them on the merits because of the Circular the Revenue has issued earlier, setting out the Revenue's policy not to contest the matters with less than one crore disputed tax. So, unless we are persuaded to frame the third substantial question of law, there is no scope for adjudication.

5. In these circumstances, we set out the facts, first, to decide whether we should reconsider framing the third substantial question of law. If the Revenue has the third substantial question of law framed, then we will get into other aspects of the matter.

6. The respondent-assessee deals in mining, processing, and exporting of iron ore. For the assessment year 2008-09, it filed the returns. The Revenue processed the return and selected it for scrutiny. In August 2009, as a preliminary step, the Revenue issued to the assessee notice under Section 143 (2) of the Income Tax Act ("Act"). Through the order, dated 13 December 2010, the Assessing Officer disallowed certain expenditure under section 14 A of the Act.

7. Aggrieved, the assessee appealed to the Commissioner of Income Tax (A). In November 2013, the appellate authority partly allowed the appeal. Then, though the assessee and the Revenue filed appeals before the Income Tax Appellate Tribunal ("the Tribunal"). Through its order, dated 31 October 2014, the Tribunal dismissed the Revenue's appeal but allowed the assessee's. In that context, the Revenue filed this Tax Appeal.

The Substantial Questions of Law before this Court:

8. In its appeal, the Revenue framed three substantial questions of law: (a) to (c). This Court accepted two and reframed them: (a) and (c). Through order, dated 7 January 2016, it refused to accept one substantial question of law: (b).

The Renewed Effort:

9. The Revenue, now, has come up with a Miscellaneous Application. It wants the Court to frame a few more questions of law. But the respondent-assessee objects to it. It contends these substantial questions of law are identical to what this Court earlier refused to frame. So we have taken up as a preliminary issue whether we should frame the additional substantial question of law despite this Court's earlier rejection on that count.

Arguments:

The Revenue:

10. Ms Amira A. Razaq, the learned Standing Counsel for the Revenue, has submitted that the taxation jurisprudence does not recognise the common law principle of res judicata. According to her, if the Court finds a vital issue affecting the case outcome, it must frame a substantial question of law at any stage of the proceedings. Its earlier disinclination or rejection notwithstanding, the Court ought to reframe the issue in the interest of justice.

11. Ms Razaq has forcefully argued in the alternative, too: the issue then rejected to be framed and the issue now pressed into service are different; the latter is more comprehe