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PR. COMMISSIONER OF INCOME TAX(CENTRAL)-2 vs NAGAR DAIRY PVT. LTD.

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Order pronounced on: 03 March, 2025

+ ITA 320/2023, CM APPL. 9854/2025 (Cross Objection) & CM APPL. 9855/2025 (Delay 471 Days in Filing Cross Objection)

PR. COMMISSIONER OF INCOME TAX
(CENTRAL)-2 …..Appellant
Through: Mr. Sanjay Kumar, Ms. Monica Benjamin & Ms. Easha, Advs.
versus

NAGAR DAIRY PVT. LTD. …..Respondent
Through: Mr. Ved Jain, Mr. Nischay Kantoor & Ms. Soniya Dodeja, Advs.

+ ITA 326/2023, CM APPL. 9852/2025 (Cross Objection) & CM APPL. 9853/2025 (Delay 471 Days in Filing Cross Objection .)

PR. COMMISSIONER OF INCOME TAX
(CENTRAL)-2 …..Appellant
Through: Mr. Sanjay Kumar, Ms. Monica Benjamin & Ms. Easha, Advs.

versus

NAGAR DAIRY PVT. LTD. …..Respondent
Through: Mr. Ved Jain, Mr. Nischay Kantoor & Ms. Soniya Dodeja, Advs.

+ ITA 341/2023, CM APPL. 9857/2025 (Cross Objection) &
CM APPL. 9858/2025 (Delay 471 Days in Filing Cross Objection .)

PR. COMMISSIONER OF INCOME TAX
(CENTRAL)-2 …..Appellant
Through: Mr. Sanjay Kumar, Ms. Monica Benjamin & Ms. Easha, Advs.

versus
NAGAR DAIRY PVT. LTD. …..Respondent
Through: Mr. Ved Jain, Mr. Nischay Kantoor & Ms. Soniya Dodeja, Advs.

+ ITA 369/2023, CM APPL. 9849/2025 (Cross Objection) & CM APPL. 9850/2025 (Delay 471 Days in Filing Cross Objection.)

PR. COMMISSIONER OF INCOME TAX
(CENTRAL)-2 …..Appellant
Through: Mr. Sanjay Kumar, Ms. Monica Benjamin & Ms. Easha, Advs.
versus

NAGAR DAIRY PVT. LTD. …..Respondent
Through: Mr. Ved Jain, Mr. Nischay Kantoor & Ms. Soniya Dodeja, Advs.
CORAM:
HON’BLE MR. JUSTICE YASHWANT VARMA
HON’BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR

O R D E R

YASHWANT VARMA, J.

1. In terms of this order, we propose to dispose of the preliminary objection which was raised by the appellants with respect to the maintainability of the cross-objections filed by the respondent-assessee.
2. The appeals emanate from an order dated 24 November 2022 passed by the Income Tax Appellate Tribunal1 and had originally posited the following questions of law for our consideration:
“A. Whether the Ld. ITAT has erred in law on the facts of the case in confirming the order of the Ld. CIT(A) on account of unexplained purchases amounting to Rs. 1,77,31,37,509/- while holding that the books of accounts of the assessee were defective?
B. Whether the Ld. ITAT has erred in law on the facts of the case in not upholding the action of the AO in disallowance of Rs. 1,08,34,15,088/- under Section 40A(3) of the Act and in holding that no addition was made by the AO under Section 40A(3) whereas the AO had categorically mentioned this addition in order and also initiated penalty under Section 271(l)(c) of the Act, though no separate addition was made considering the disallowance of higher amount on account of bogus purchases?
C. Whether the Ld. ITAT has erred in law on the facts of the case in adjudicating the addition made under Section 40A(3) of the Act when the assessee had not taken any ground in this respect before the Ld. CIT(A)?
D. Whether, the Ld. ITAT has erred in law on the facts of the case in not sustaining the addition made by the Assessing Officer of Rs.72,18,132/- on the issue of Deemed Dividend even when the provisions of the Section 2(22)(e) of the Act are clearly applicable?”
3. After hearing learned counsels for respective sides, we had by our order of 18 September 2024 admitted these appeals on the following question of law:
“A. Whether the Tribunal has erred in not upholding the action of the Assessing Officer in disallowing INR 1,08,34,15,088/- under Section 40A(3) and in holding that no addition was made by the AO under Section 40A(3) whereas the AO had categorically mentioned this addition in the order and had also initiated penalty proceedings under Section 271(l)(c), though no separate addition was made considering the disallowance of higher amount on account of bogus purchases?”
4. The appeals themselves arise out of a search and seizure operation undertaken on 17 September 2010 in terms of Section 132(1) of the Income Tax Act, 19612, in the case of the Nagar Dairy Group. 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 Act. By the time the matter reached the Tribunal, we find that insofar as the challenge of the assessee to the invocation of Section 153C was concerned, the same came to be negated with the Tribunal noting as follows:
“4. The assessee has raised the issue of satisfaction and also assessment of undisclosed income not based on seized document. With regard to the recording of satisfaction note, the matter stands adjudicated in the case of the assessee in CO Nos. 26, 27 & 28/Del/2016 by relying on the Judgment of Hon’ble Apex Court in the case of Super Malls Pvt. Ltd. in CA No. 2006 to 2007 of 2020, by following the very same ratio since the satisfaction recorded by the ACIT, Central Circle-21 who is the common AO of the searched person and the other person, the Ground No. 1 raised by the assessee are liable to be dismissed.
5. With regard to the objection that the addition has not been based on seized material, we hold that the instant assessment is not an abated assessment owing to the recording of satisfaction and issue of notice u/s 153C on 26.09.2012 and filing of the regular return of income on 30.09.2011. The assessment cannot be said to be unabated. Hence, the judgment in the case of PCIT Vs. Kabul Chawla 380 ITR 573 is not applicable to the instant case. Accordingly, we do not find merit in the Ground No. 2 of the C.O. Thus, we dismiss the Ground No. 2 of the C.O.
In view of the same, the issues are being examined on merits of the case in the appeal of the revenue along with Ground No. 3 of the Cross Objection.”
The appeals preferred by the assessee, however, came to be partly allowed and which led to the institution of the present appeals.
5. The appellants argue that the cross-objections would not be maintainable in light of Section 260A of the Act neither envisaging nor creating such a remedy. According to learned counsels, 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. It was their contention that 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. According to them, absent Section 260A conferring a right upon a respondent in such an appeal to prefer a cross-objection, the objections as preferred are liable to be dismissed. The appellants argue that Section 260A clearly does not create such a right in explicit terms. It was further averred that even the language and structure of the provision is not demonstrative of an implied intent of a cross-objection being maintained. They would thus submit that it would be wholly incorrect to impute the principles underlying Order XLI Rule 22 of the Civil Procedure Code, 19083 as being applicable to an appeal referrable to Section 260A of the Act. This more so since, according to the appellants, a cross-objection has not been recognised as an avenue available to be pursued in an appeal from an appellate decree under the Code itself.
6. Mr. Kantoor, learned counsel representing the respondent-assessee had addressed submissions in support of the maintainability of the cross-objections, arguing that any finding or conclusions rendered by this Court on the question as posited would result in the respondent being left remediless to assail the conclusions rendered by the Tribunal with respect to invocation of Section 153C. According to learned counsel, Section 260A 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.
7. According to Mr. Kantoor, irrespective of the answer that may ultimately be framed by this Court while evaluating the substantial question of law on which the appeals have been admitted, the objections taken by the respondents to the maintainability of the cross-objection would foreclose all rights of challenge that the respondents could urge.
8. This aspect was sought to be highlighted with Mr. Kantoor bidding us to bear in consideration the facts of the present appeal itself and where although the invocation of Section 153C of the Act was upheld, the various additions made against the respondent-assessee had come to be set aside. To the extent that the Tribunal has upheld the initiation of search assessment, the appellant, learned counsel argued, would clearly not be an aggrieved party. The appeal of the Department, Mr. Kantoor submitted, would thus be confined to the deletion of the various additions which were made in the course of assessment.
9. According to learned counsel, the respondent, however, faces the spectre of the High Court either accepting the challenge which stands raised at the behest of the Department or affirming the view expressed by the Tribunal. While in the case of the latter, the assessee may not be prejudiced if the High Court were to dismiss the appeal, it would stand permanently deprived of the right to question or assail the rendering of opinion by the Tribunal on the invocation of Section 153C of the Act. Learned counsel argued that the issue of whether Section 153C was validly invoked undoubtedly strikes at the root of the jurisdiction which was exercised by the Assessing Officer4. It was pointed out that the assessee had argued before the Tribunal that there was no incriminating material which would have justified the invocation of that provision and which undoubtedly is a sine qua non for the commencement of search assessment proceedings against the other person. Mr. Kantoor thus submitted that the right to prefer cross-objections should be read into the provisions of Section 260A of the Act.
10. Learned counsel also sought to buttress his submissions with the aid of the following example. He submitted that the Court may consider a hypothetical case where an assessment is triggered by an AO invoking the powers of reassessment or alternatively, an assessment coming to be annulled by the Commissioner in exercise of revisional powers. This may lead to various additions being made by the AO adverse to the assessee. If the view advocated by the appellants were to be accepted, the ruling of the Tribunal on the validity of Section 148 or Section 263 of the Act being invoked would be rendered immunity from challenge in an appeal preferred by the Revenue. Hereto, the assessee would stand deprived of the right to contend that the determination by the Tribunal on these issues was wrong. He contended that the determination on those issues would constitute an integral part of the decision which gives rise to the question of law on which the appeal itself may have been instituted in terms of Section 260A(1) of the Act and thus the right to file cross-objections liable to be recognised.
11. Learned counsels also laid stress upon the language in which sub-section (4) of Section 260A stands couched and submitted that although in terms thereof the right of a respondent in such an appeal stands confined to addressing arguments solely on the ground that the appeal does not involve a substantial question of law, the section itself provides that the provisions of the Code as far as may be applicable would govern. In view of the above, Mr. Kantoor submitted that there is no justification to deprive the respondent of the salutary right that the Code otherwise confers.
12. It becomes pertinent to note that insofar as Section 260A is concerned, only the Karnataka High Court appears to have considered and conclusively answered the question which stands posited holding that a cross-objection would not be maintainable in an appeal under Section 260A. At least no other decision was cited for our consideration in this regard. In Smt. Jyoti Kumari v. Asst. CIT5, the Karnataka High Court had ultimately come to hold that since a cross-objection would not be maintainable in a second appeal instituted in terms of the Code, a fortiori that right cannot be read into Section 260A of the Act.
13. The decision in Jyoti Kumari is based on the High Court having noticed some of the landmark decisions rendered by the Supreme Court in the context of the right to prefer a cross-objection as contemplated by Order XLI Rule 22 as well as various other High Courts which appear to have taken conflicting views with respect to the filing of cross-objection in a second appeal. The principal decisions of the Supreme Court which were noticed by the Karnataka High Court were those in Superintending Engineer v. B. Subba Reddy6 and Municipal Corpn. of Delhi v. International Security & Intelligence Agency Ltd.7
14. However, it would be pertinent to note that none of the decisions of the Supreme Court cited above were concerned with the maintainability of cross-objections in a second appeal nor does that question appear to have been raised or answered. Those decisions had principally ruled on the scope of Order XLI Rule 22 of the Code and the extent of the right inhering in a party-respondent to assail a part of the judgment or decree operating against it or a finding appearing in such a judgment adverse to that party.
15. For the purposes of examining the scope of the right which
Order XLI Rule 22 of the Code creates, we at the outset deem it appropriate to set out a table which captures the significant amendments which came to be introduced in that provision and how the rule read pre and post amendment of the Code by virtue of Act 104 of 1976:
“Order 41 Rule 22 prior to its amendment
Order 41 Rule 22 as amended by Act 104 of 1976
22. Upon hearing respondent may object to decree as if he had preferred a separate appeal.—(1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree on any of the grounds decided against him in the Court below, but take any cross-objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the appellate court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the appellate court may see fit to allow.
22. Upon hearing respondent may object to decree as if he had preferred a separate appeal.—(1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree [but may also state that the finding against him in the Court below in respect of any issue ought to have been in his favour; and may also take any cross-objection] to the decree which he could have taken by way of appeal provided he has filed such objection in the appellate court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the appellate court may see fit to allow.
 
 
[Explanation.—A respondent aggrieved by a finding of the Court in the judgment on which the decree appealed against is based may, under this rule, file cross-objection in respect of the decree insofar as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in favour of that respondent.]”
(emphasis supplied)

16. As the provision originally stood, a respondent in an appeal was entitled to not only support the decree on any other ground decided against it but also conferred a right to prefer a cross-objection to the decree in the same manner as they would have by way of an appeal. Post the 1976 amendments, the provision as it stands now explicitly enables the respondent to also assail the correctness of a finding contained in the judgment under appeal rendered upon an issue and assert that the same ought to have been decided in its favour. The aforesaid right which the statute now confers is in addition to it being open to the respondent to not only support the decree but to also prefer a cross-objection to the decree itself. The three recourses which are open for the respondent to adopt were elaborately explained by the Supreme Court in B. Subba Reddy, Banarsi v. Ram Phal8 and International Security & Intelligence Agency.
17. Explaining the scope of Order XLI Rule 22 of the Code, the Supreme Court in B. Subba Reddy summed up the legal position in the following terms:
“23. From the examination of these judgments and the provisions of Section 41 of the Act and Order 41 Rule 22 of the Code, in our view, the following principles emerge:
(1) Appeal is a substantive right. It is a creation of the statute. Right to appeal does not exist unless it is specifically conferred.
(2) Cross-objection is like an appeal. It has all the trappings of an appeal. It is filed in the form of memorandum and the provisions of Rule 1 of Order 41 of the Code, so far as these relate to the form and contents of the memorandum of appeal apply to cross-objection as well.
(3) Court fee is payable on cross-objection like that on the memorandum of appeal. Provisions relating to appeals by an indigent person also apply to cross-objection.
(4) Even where the appeal is withdrawn or is dismissed for default, cross-objection may nevertheless be heard and determined.
(5) The respondent even though he has not appealed may support the decree on any other ground but if he wants to modify it, he has to file cross-objection to the decree which objections he could have taken earlier by filing an appeal. Time for filing objection which is in the nature of appeal is extended by one month after service of notice on him of the day fixed for hearing the appeal. This time could also be extended by the court like in appeal.
(6) Cross-objection is nothing but an appeal, a cross-appeal at that. It may be that the respondent wanted to give a quietus to the whole litigation by his accepting the judgment and decree or order even if it was partly against his interest. When, however, the other party challenged the same by filing an appeal the statute gave the respondent a second chance to file an appeal by way of cross-objection if he still felt aggrieved by the judgment and decree or order.
24. In the present case, as noted above, the respondent did not file any appeal under Section 39 of the Act in the High Court which right he admittedly had when the award of interest @ 18% per annum was reduced to 12% per annum by the trial court. Section 41 of the Act is merely procedural in nature. If there is no right of cross-objection given under Section 39 of the Act, it cannot be read into Section 41 of the Act. Filing of cross-objection is not procedural in nature. Section 41 of the Act merely prescribes that the procedure of the Code would be applicable to the appeal under Section 39 of the Act. We are, therefore, of the opinion that cross-objection by the respondent was not maintainable and the High Court was not correct in holding otherwise and restoring the award of interest to 18% per annum and thus interfering in the decree of the trial court.”
18. As is evident from the above, in B. Subba Reddy the Supreme Court was principally examining the issue of whether a cross-objection would be maintainable in appellate proceedings referable to Section 39 of the Arbitration and Conciliation Act, 19969. It was in that aforesaid context that it observed that a cross-objection has all the trappings of an appeal since it could be continued and determined even if the principal appeal came to be withdrawn. It was further observed that the right conferred by Order XLI Rule 22 of the Code is intended to enable the respondent to seek closure of the entire litigation and for all questions being finally laid to rest even in situations where the judgment or decree may be only partly against its interest.
19. However, the Supreme Court in B. Subba Reddy categorically held that an appeal is a substantive right and essentially a creation of the statute. It was thus explained that a right to appeal cannot be claimed to be one which inheres in a party and that it must be founded upon a specific statutory conferment. It was in the aforesaid backdrop that it held that since the right to prefer cross-objections was not merely procedural but one which would have to be based on a statutory grant, the cross-objections in the appeal under Section 39 of the Arbitration Act would not be maintainable.
20. The question again appears to have arisen for the consideration of the Supreme Court in Banarsi. In Banarsi, the Supreme Court firstly culled out the three possible scenarios in which a respondent may seek to claim the right to prefer cross-objections. This becomes apparent from a reading of paragraphs 10 and 11 of the report and which are extracted hereinbelow:
“10. The CPC amendment of 1976 has not materially or substantially altered the law except for a marginal difference. Even under the amended Order 41 Rule 22 sub-rule (1) a party in whose favour the decree stands in its entirety is neither entitled nor obliged to prefer any cross-objection. However, the insertion made in the text of sub-rule (1) makes it permissible to file a cross-objection against a finding. The difference which has resulted we will shortly state. A respondent may defend himself without filing any cross-objection to the extent to which decree is in his favour; however, if he proposes to attack any part of the decree he must take cross-objection. The amendment inserted by the 1976 amendment is clarificatory and also enabling and this may be made precise by analysing the provision. There may be three situations:
(i) The impugned decree is partly in favour of the appellant and partly in favour of the respondent.
(ii) The decree is entirely in favour of the respondent though an issue has been decided against the respondent.
(iii) The decree is entirely in favour of the respondent and all the issues have also been answered in favour of the respondent but there is a finding in the judgment which goes against the respondent.
11. In the type of case (i) it was necessary for the respondent to file an appeal or take cross-objection against that part of the decree which is against him if he seeks to get rid of the same though that part of the decree which is in his favour he is entitled to support without taking any cross-objection. The law remains so post-amendment too. In the type of cases (ii) and (iii) pre-amendment CPC did not entitle nor permit the respondent to take any cross-objection as he was not the person aggrieved by the decree. Under the amended CPC, read in the light of the explanation, though it is still not necessary for the respondent to take any cross-objection laying challenge to any finding adverse to him as the decree is entirely in his favour and he may support the decree without cross-objection; the amendment made in the text of sub-rule (1), read with the explanation newly inserted, gives him a right to take cross-objection to a finding recorded against him either while answering an issue or while dealing with an issue. The advantage of preferring such cross-objection is spelled out by sub-rule (4). In spite of the original appeal having been withdrawn or dismissed for default the cross-objection taken to any finding by the respondent shall still be available to be adjudicated upon on merits which remedy was not available to the respondent under the unamended CPC. In the pre-amendment era, the withdrawal or dismissal for default of the original appeal disabled the respondent to question the correctness or otherwise of any finding recorded against the respondent.”
21. Insofar as case (i) was concerned and where the decree partly be against the respondent, the Supreme Court held that it would be necessary for the respondent to either file an appeal against that part of the decree or prefer a cross-objection. Proceeding then to take note of the legislative changes that had been ushered in by Act 104 of 1976, the Supreme Court, while dealing with cases (ii) and (iii), explained that under the amended Code, the respondent would have the right to assail the correctness of an adverse finding, even though the decree may be entirely in its favour without preferring a cross-objection. It further observed that it would be open for the respondent to continue to prosecute the cross-objection, notwithstanding the original appeal itself coming to be withdrawn or dismissed.
22. While explaining the scope of Order XLI Rule 22 in International Security & Intelligence Agency, the Supreme Court rendered the following pertinent observations:
“14. Right of appeal is creature of statute. There is no inherent right of appeal. No appeal can be filed, heard or determined on merits unless the statute confers right on the appellant and power on the court to do so. Section 39 of the Act confers right to file appeal, insofar as the orders passed under this Act are concerned, only against such of the orders as fall within one or other of the descriptions given in clauses (i) to (vi) of sub-section (1) of Section 39. Parliament has taken care to specifically exclude any other appeal being filed, against any order passed under the Act but not covered by clauses (i) to (vi) abovesaid, by inserting the expression “and from no others” in the text of sub-section (1). Clause (a) of Section 41 extends applicability of all the provisions contained in the Code of Civil Procedure, 1908 to (i) all proceedings before the court under the Act, and (ii) to all the appeals, under the Act. However, the applicability of such of the provisions of the Code of Civil Procedure shall be excluded as may be inconsistent with the provisions of the Act and/or of rules made thereunder. A bare reading of these provisions shows that in all the appeals filed under Section 39, the provisions of the Code of Civil Procedure, 1908 would be applicable. This would include the applicability of Order 41 including the right to take any cross-objection under Rule 22 thereof to appeals under Section 39 of the Act.
15. Right to prefer cross-objection partakes of the right to prefer an appeal. When the impugned decree or order is partly in favour of one party and partly in favour of the other, one party may rest contented by his partial success with a view to giving a quietus to the litigation. However, he may like to exercise his right of appeal if he finds that the other party was not interested in burying the hatchet and proposed to keep the lis alive by pursuing the same before the appellate forum. He too may in such circumstances exercise his right to file appeal by taking cross-objection. Thus taking any cross-objection to the decree or order impugned is the exercise of right of appeal though such right is exercised in the form of taking cross-objection. The substantive right is the right of appeal; the form of cross-objection is a matter of procedure.
16. Though the statement of law made hereinabove flows simply by the reading of the relevant statutory provisions yet some available decisions may also be noticed. In Bhadurmal v. Bizaatunnisa Begum [AIR 1964 AP 365 : (1964) 1 An WR 290] a Division Bench presided over by Jaganmohan Reddy, J. (as His Lordship then was) held cross-objection to be maintainable in an appeal preferred under Sections 47 to 49 of the Hyderabad Jagirdars Debt Settlement Act, 1952 because the provisions of the Civil Procedure Code were generally applicable by virtue of Section 51 thereof. The applicability of Order 41 Rule 22 to the appeals under that Act was held not excluded merely because provisions governing grounds of appeal and court fees were specifically enacted in the Hyderabad Act. In Inayatullah Khan v. Diwanchand Mahajan [AIR 1959 MP 58 : 1958 MP LJ 786] Chief Justice M. Hidayatullah (as His Lordship then was) upheld maintainability of the cross-objection in an election appeal under Section 116-A of the Representation of the People Act, 1951 because the High Court as an appellate court hearing an appeal under Section 116-A was enjoined to exercise the same powers, jurisdiction and authority and to follow the same procedure as it would have exercised or followed in respect of a civil appeal under the Code of Civil Procedure. In Ramasray Singh v. Bibhisan Sinha [AIR 1950 Cal 372] the Division Bench consisting of Harries, C.J. and Bachawat, J. (as His Lordship then was) held that conferment of right of appeal by Section 38 of the Bengal Money-Lenders Act, 1940 which spoke of the order being appealable in the same manner as if it were a decree of the court implied a right in the respondent to file cross-objection inasmuch as the jurisdiction to hear appeal was conferred on a pre-established civil court, namely, the Court of the District Judge and nothing was expressly stated as to the procedure regulating such appeal. In A.L.A. Alagappa Chettiar v. Chockalingam Chetty [AIR 1919 Mad 784 : ILR 41 Mad 904 (FB)] a Full Bench of the High Court of Madras presided over by Wallis, C.J. held that right of the respondent to proceed by way of memorandum of cross-objections was strictly incidental to the filing of appeal by opposite party and therefore in an appeal under Sections 46 and 47 of the Provincial Insolvency Act, 1907, cross-objections were maintainable as the procedure prescribed in the Civil Procedure Code is the standard procedure and applicable to courts exercising powers in insolvency cases.
17. With advantage, we may also refer to observations of this Court made in Baru Ram v. Prasanni [AIR 1959 SC 93 : 1959 SCR 1403] . Section 116-A of the Representation of the People Act, 1951 contemplates an appeal being laid before the Supreme Court from every order made by the High Court under Section 98 or Section 99 of that Act. Section 116-C provides for every such appeal being heard and determined by the Supreme Court as nearly as may be in accordance with the procedure applicable to the hearing and determination of any appeal from any final order passed by the High Court in exercise of its original civil jurisdiction subject to the provisions of that Act and the Rules, if any. All the provisions of the Code of Civil Procedure, 1908 and rules of the court shall, so far as may be, apply in relation to such appeal. P.B. Gajendragadkar, J. (as His Lordship then was) speaking for the Court observed : (AIR p. 99, para 11)
“There is no doubt that, in an ordinary civil appeal, the respondent would be entitled to support the decree under appeal on grounds other than those found by the trial court in his favour. Order 41 Rule 22 of the Code of Civil Procedure which permits the respondent to file cross-objections recognize the respondent’s right to support the decree on any of the grounds decided against him by the court below. In the present case no appeal could have been preferred by Respondent 1 because she had succeeded in obtaining the declaration that the appellant’s election was void and it should therefore be open to her to support the final conclusion of the High Court by contending that the other finding recorded by the High Court which would go to the root of the matter is erroneous. Prima facie there appears to be some force in this contention;”
However, the Court did not express any final opinion thereon as it was considered not necessary to decide the point in that appeal.
18. We have, therefore, no doubt in our mind that right to take a cross-objection is the exercise of substantive right of appeal conferred by a statute. Available grounds of challenge against the judgment, decree or order impugned remain the same whether it is an appeal or a cross-objection. The difference lies in the form and manner of exercising the right; the terminus a quo (the starting point) of limitation also differs.”
23. However, upon noticing the principles which had come to be laid down in B. Subba Reddy, the Supreme Court held:
“19. In Superintending Engineer v. B. Subba Reddy [(1999) 4 SCC 423] a two-Judge Bench of this Court observed (vide SCC p. 434, para 24):
“If there is no right of cross-objection given under Section 39 of the Act, it cannot be read into Section 41 of the Act. Filing of cross-objection is not procedural in nature. Section 41 of the Act merely prescribes that the procedure of the Code would be applicable to the appeal under Section 39 of the Act. We are, therefore, of the opinion that cross-objection by the respondent was not maintainable….”
Such observation is not correct and proceeds on certain wrong premises. Firstly, form of cross-objection is procedural and is only a manner of exercising right of appeal which is substantive, as we have already stated. Secondly, it is not merely the procedure prescribed by the Code of Civil Procedure which has been made applicable to proceedings under the Arbitration Act by Section 41(a) of the Act; the entire body of the Code of Civil Procedure, 1908 has been made applicable to all proceedings before the court and to all appeals under the Arbitration Act, 1940. The provision is general and wide in its applicability which cannot be curtailed; the only exception being where the provisions of the Arbitration Act and/or of the rules made thereunder may be inconsistent with the provisions of the Code of Civil Procedure, 1908 in which case the applicability of the latter shall stand excluded but only to the extent of inconsistency. We may hasten to add that to the extent of our disagreement with the law laid down in B. Subba Reddy case [(1999) 4 SCC 423] the proposition appears to have been rather widely stated in that case. In fact the question before the Court in B. Subba Reddy case [(1999) 4 SCC 423] was whether cross-objection seeking the relief of award of interest at a higher rate was maintainable though such an order did not fall within the purview of Section 39(1) of the Act.
20. Once we hold that by taking cross-objection what is being exercised is the right of appeal itself, it follows that the subject-matter of cross-objection and the relief sought therein must conform to the requirement of Section 39(1). In other words, a cross-objection can be preferred if the applicant could have sought for the same relief by filing an appeal in conformity with the provisions of Section 39(1) of the Act. If the subject-matter of the cross-objection is to impugn such an order which does not fall within the purview of any of the categories contemplated by clauses (i) to (vi) of sub-section (1) of Section 39 of the Act, the cross-objection shall not be maintainable.”
24. It is thus apparent that insofar as the Code is concerned, the interplay between Section 96 and Order XLI Rule 22 of the Code is no longer res integra. The question, however, which still merits consideration is whether a cross-objection would be maintainable in a second appeal which traces its genesis to Section 100 of the Code. This aspect assumes significance since Order XLI Rule 22 is placed in Chapter XLI and which primarily deals with appeals from original decrees. Mr. Kantoor essentially urged us to hold that the said provision would apply even to appeals from appellate decrees by virtue of Order XLII Rule 1 and which stipulates that the rules comprised in Order XLI would, ‘so far as may be,’ relevant also apply to appeals from appellate decrees. Mr. Kantoor would thus argue that the expression ‘so far as may be’ should be read as an embodiment of the statutory intent to read the right created by Order XLI Rule 22 as being applicable to appeals from appellate decrees including second appeals.
25. Insofar as the question of whether a cross-objection would be maintainable in a second appeal is concerned, the only decision that was cited for our consideration was that rendered by a learned Judge of the Kerala High Court in Palasseri Velayudhan v. Palasseri Ithayi10. While answering this question, the learned Judge in Palasseri held as follows:
“13. The question then arises whether cross objections can be filed by any of the respondents in a second appeal. When a second appeal can be maintained only on a substantial question of law it would appear that the respondent, if he wants to raise any other substantial question of law, has to move this Court by way of a separate appeal. Learned counsel for the respondents-cross objectors draws attention to the provision contained in R. 1 of O. 42 which makes the rules of O. 41 so far as may be applicable to appeals from appellate decrees. Rule 22 of O. 41 enables any respondent in an appeal to take any cross objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the appellate court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal or within such further time as the appellate court may see fit to allow. This provision is applicable to second appeals also and the right to file cross objections in a second appeal has not been taken away by the amended Section 100 or by any other provision introduced by the amendment, argues counsel. He has also cited various judicial pronouncements in support of this contention.
14. Rule 1 of Order 42 makes the rules of Order 41 so far as may be applicable to appeal as from appellate decrees. Rule 2 introduced by the amendment of 1976 only refers to the power of court to direct that the appeal be heard on the questions formulated by it. That was inserted in consequence to the amendment made in Section 100. Still Rule 1 of Order 42 remained unchanged. The question whether the provisions contained in Rule 10 of Order 41 apply to appeals under Letters Patent came up for consideration before the Privy Council in Sabitri Thakurain v. Savi, AIR 1921 PC 80, where it was held that the provision applies to appeals under Letters Patent as to appeal under the Civil Procedure Code. The Madhya Pradesh High Court in the decision in Satyabhamadevi v. Ramkishore, AIR 1975 MP 115 held that Order 41 applies to Letters Patent Appeals and in appeals from the decisions of a single Judge in original matters or in first appeals which lie to the High Court as of right under Clause 10 of the Letter Patent (MP). Relying on the decision in AIR 1921 PC 80, it was held that cross objection can be filed under Rule 22 as of right. The Jammu and Kashmir High Court is also of the same view. In Wali Mohd. v. Faqir Mohd., AIR 1978 J & K 92, a Full Bench of that High Court held that Order 41 of the Code of Civil Procedure applies to Letters Patent Appeals. Since Order 41 permits the filing of the cross objections by the respondent there is no warrant for the conclusion that the procedure indicated in the aforesaid order does not apply to cross objections and that leave of the court is a must before they are filed. It is observed that the restriction to seek leave to file Letters Patent Appeal does not apply in the case of cross objections.
15. The purpose of Order 41, Rule 22 was discussed in detail by the Rangoon High Court in Ma Lon v. Ma Mya May, AIR 1939 Rangoon 59. After referring to the provisions contained in Rule 22 of Order 41 it was held that where respondent takes any cross objection to the decree such cross objection would be governed by the rules of porcedure governing an appeal because under Order 41, Rule 22(1) a cross objection must be such as the respondent could have taken by way of appeal.
16. The position therefore is that a respondent in an appeal can maintain a cross objection under Rule 22 of Order 41 even without the permission of the court. That provision has been made applicable to the appeals filed under Letters Patent in the decisions aforementioned. The question arises whether the principle enunciated in the above decisions can be applied to the case of cross objection filed in a second appeal filed under Section 100 C.P.C.
17. Only those provisions of Order 41 applicable to a first appeal are made applicable to an appeal filed under Section 100, C.P.C. by Rule 1 of Order 42. Even before the amendment of C.P.C. in 1976 the rule was same. It has to be seen whether there is any change on account of the amendment of Section 100, C.P.C. On a careful reading of Rule 1 of Order 42 it would appear that all the rules of Order 41 are not made applicable to second appeals whereas only those provisions “so far as may be” are made applicable. The Nagpur High Court in Kesho Bhika v. Tukaram Puna, AIR 1951 Nagpur 8, has considered the right of a respondent in a second appeal to support a decree. After referring to the provisions contained in Rule 22 of Order 41 and Rule 1 of Order 42 it was held that the words “so far as may be” means that if any other provision prohibits the respondent from agitating any of the grounds he would not be able to support the decree on those grounds.
18. In order to find out whether a respondent in a second appeal is competent to maintain a cross objection and whether Rule 22 of Order 41 has been made applicable to second appeals by virtue of the provision in Rule 1 of Order 42 one has to see the grounds on which a cross objection can be taken in a first appeal. Under Rule 22 a cross objection can be filed only by a party who might have appealed but did not choose to file an appeal. The test to determine whether any objection can be taken by way of cross objection is to see whether the respondent could have appealed against the portion of the decree which is against him and whether he could have raised it in a memorandum of appeal. If he can raise such an objection in a memorandum of appeal he can also raise it by way of cross objections. The question therefore is whether the objection sought to be raised can be raised in a memorandum of second appeal.
19. An appeal to this Court under Section 100 lies only if this court is satisfied that the case involves a substantial question of law. If the memorandum of appeal has precisely stated the substantial question of law involved in the appeal and if this court is satisfied that such a question is involved this court has to formulate that question and hear the appeal on the question so formulated. If on the objections raised by the respondent a substantial question of law arises he can maintain a second appeal subject to the conditions embodied in Section 100, C.P.C. The provision of Rule 22 of Order 41 regarding the taking of cross objections by respondent in a first appeal can therefore be made applicable to an appeal from an appellate decree since the provisions in Order 41 “so far as may be” had been made applicable to second appeals also. The phrase “so far as may be” only means that provisions of Order 41 are to be made applicable to second appeals subject to the other provisions contained in the Act relating to second appeals. In other words, the applicability of Rule 22 of Order 41 to an appeal against an appellate decree will be subject to the provisions contained in Section 100, C.P.C.
20. The position therefore is that a cross objection can be maintained in an appeal against an appellate decree but only if a substantial question of law is raised therein. The stringent conditions embodied in Section 100 shall be applicable to a cross objection filed in a second appeal. In other words, the cross objection shall precisely state the substantial question of law involved in the cross objection and the cross objections will be admitted only if this Court is satisfied that the case involves a substantial question of law. On such admission of the cross objections this court has to formulate that question and the cross objections shall be heard only on the question so formulated.”
26. As was noticed by us in the prefatory parts of this order, the question of whether a cross-objection would be maintainable under Section 260A of the Act has been directly examined and answered only in Jyoti Kumari. It was in this matter that the Karnataka High Court was called upon to consider the maintainability of a cross-objection in an appeal instituted under Section 260A of the Act. The High Court in Jyoti Kumari firstly took note of the legislative history preceding the amendments which were introduced in Order XLI Rule 22 of the Code and which had fallen for notice of the Supreme Court in Ravinder Kumar Sharma v. State of Assam11. This becomes evident from a reading of paragraph 49 of the report which is reproduced hereunder:
“49. Though Sri Shankar, learned counsel for the assessee, has placed reliance on the following decisions of the Supreme Court as also other High Courts to support the submission with regard to the maintainability of a cross-objection, even in a second appeal or in an appeal of the nature of section 260A of the Act, viz., Ravinder Kumar Sharma v. State of Assam reported in (1999) 7 SCC 435 relying particularly on paras. 19 to 24:
“19. In connection with Order 41 rule 22 CPC after the 1976 amendment, we may first refer to the judgment of the Calcutta High Court in Nishambhu Jana v. Sova Guha [1984-85] 86 CWN 685. In that case, Mookerjee J. referred to the 54th Report of the Law Commission (at page 295, para. 41.70) to the effect that Order 41, rule 22 gave two distinct rights to the respondent in the appeal. The first was the right to uphold the decree of the court of first instance on any of the grounds which that court decided against him. In that case, the finding can be questioned by the respondent without filing cross objections. The Law Commission had accepted the correctness of the Full Bench of the Madras High Court in Venkata Rao case, AIR 1943  Mad 698. The Commission had also accepted the view of the Calcutta High Court in Nrisingha Prosad Rakshit v. Commissioners of Bhadreswar Municipality that a cross-objection was wholly unnecessary in case the adverse folding was to be attacked. The Commission observed that the words ‘support the decree’ appeared to be strange and ‘what is meant is that he may support it by asserting that the ground decided against him should have been decided in his favour. It is desirable to make this clear’. That is why the main part of Order 41, rule 22 was amended to reflect the principle in Venkata Rao case, AIR 1943 Mad 698 as accepted in Chandra Prabhuji case, AIR 1973 SC 2565. 
20. So far as the Explanation was concerned, the Law Commission stated (page 298) that it was necessary to ’empower’ the respondent to file cross-objection against the adverse finding. That would mean that a right to file cross-objections was given but it was not obligatory to file cross-objections. That was why the word ‘may’ was used. That meant that the provision for filing cross-objections against a finding was only an enabling provision. 
21. These recommendations of the Law Commission are reflected in the Statement of Objections and Reasons for the amendments. They read as follows:
‘Rule 22 [i.e. as it stood before 1976] gives two distinct rights to the respondent in appeal. The first is the right of upholding the decree of the court of first instance on any of the grounds on which that court decided against him ; and the second right is that of taking any cross-objection to the decree which the respondent might have taken by way of appeal. In the first case the respondent supports the decree and in the second case he attacks the decree. The language of the rule, however, requires some modification because a person cannot support a decree on a ground decided against him. What is meant is that he may support the decree by asserting that the matters decided against him should have been decided in his favour. The rule is being amended to make it clear. 
An Explanation is also being added to rule 22 empowering the respondent to file cross-objection in respect to a finding adverse to him notwithstanding that the ultimate decision is wholly or partly in his favour.’ 
Mookerjee J. observed in Nishambhu Jana case (see p. 689) that the amended rule 22 of Order 41 of the Code has not brought any  substantial change in the settled principles of law’ (i.e. as accepted in Venkata Rao case) and clarified (page 691) that 
‘it would be incorrect to hold that the Explanation now inserted by Act 104 of 1976 has made it obligatory to file cross-objections even when the respondent supports the decree by stating that the findings against him in the court below in respect of any issue ought to have been in his favour’. 
22. A similar view was expressed by U. N. Bachawat J. in Tej Kumar Jain v. Purshottam, AIR 1981 MP 55 that after the 1976 amendment, it was not obligatory to file cross-objection against an adverse finding. The Explanation merely empowered the respondent to file cross-objections. 
23. In our view, the opinion expressed by Mookerjee J. of the Calcutta High Court on behalf of the Division Bench in Nishambhu Jena case and the view expressed by U. N. Bachawat, J. in Tej Kumar case in the Madhya Pradesh High Court reflect the correct legal position after the 1976 amendment. We hold that the respondent-defendant in an appeal can, without filing cross-objections attack an adverse finding upon which a decree in part has been passed, against the respondent, for the purpose of sustaining the decree to the extent the lower court had dismissed the suit against the defendant-respondent. The filing of cross-objection, after the 1976 amendment is purely optional and not mandatory. In other words, the law as stated in Venkata Rao case by the Madras Full Bench and Chandre Prabhuji case by this court is merely clarified by the 1976 amendment and there is no change in the law after the amendment. 
24. The respondents before us are, therefore, entitled to contend that the finding of the High Court in regard to the absence of reasonable and probable cause or malice—(upon which the decree for pecuniary damages in B and C Schedules was based) can be attacked by the respondents for the purpose of sustaining the decree of the High Court refusing to pass a decree for non-pecuniary damages as per A Schedule. The filing of cross-objections against the adverse finding was not obligatory. There is no res judicata. Point 1 is decided accordingly in favour of the respondent-defendants.”
27. Proceeding further to notice the decisions of the Supreme Court in B. Subba Reddy as well as International Security & Intelligence Agency, the High Court ultimately held as follows:
“54. Though this judgment of the Supreme Court in the case of B. Subba Reddy cited supra had come in for examination again in the later judgment Municipal Corporation of Delhi v. International Security and Intelligence Agency Ltd. reported in (2004) 3 SCC 250 on which Sri Seshachala has placed reliance, we find that this judgment has only reiterated with regard to the nature of right for claiming a right of appeal as observed in para. 14, which is as under:
“14. Right of appeal is creature of statute. There is no inherent right of appeal. No appeal can be filed, heard or determined on merits unless the statute confers right on the appellant and power on the court to do so. Section 39 of the Act confers right to file appeal, in so far as the orders passed under this Act are concerned, only against such of the orders as fall within one or other of the descriptions given in clauses (i) to (vi) of sub-section (1) of section 39. Parliament has taken care to specifically exclude any other appeal being filed, against any order passed under the Act but not covered by clauses (i) to (vi) abovesaid, by inserting the expression ‘and from no others’ in the text of sub-section (1). Clause (a) of section 41 extends applicability of all the provisions contained in the Code of Civil Procedure, 1908, to (i)all proceedings before the court under the Act, and (ii) to all the appeals, under the Act. However, the applicability of such of the provisions of the Code of Civil Procedure shall be excluded as may be inconsistent with the provisions of the Act and/or of rules made thereunder. A bare reading of these provisions shows that in all the appeals filed under section 39, the provisions of the Code of Civil Procedure, 1908, would be applicable. This would include the applicability of Order 41 including the right to take any cross-objection under rule 22 thereof to appeals under section 39 of the Act.” 
and, therefore, having regard to the language of section 39 of the Arbitration Act, 1940, the Supreme Court ruled that section 39 being in the  nature of first appeal and with the provisions of Order 41 having been made applicable rule 22 of Order 41 was also attracted and applicable to an appeal under section 39 of the Act. However, in the present situation, we find such is not the case in so far as sub-section (7) of section 260A of the Act is concerned for the reason that the provisions of section 260A of the Act are more comparable to an appeal under section 100 of the Code of Civil Procedure rather an appeal under section 96 and even hearing in so far as the second appeal is concerned not all provisions of Order 41 are made automatically applicable to an appeal under section 100 both in terms of Order 42 read with section 108 of the Code of Civil Procedure and as the appeal being a creature of a statute, a cross-objection in terms of rule 22 being barred with an appeal until and unless there is express provision on settling the legal provisions one cannot hold that the implication or a right of cross-objection should be read into either the provisions of Order 42 read with sections 100 and 108 of the Code of Civil Procedure or under the provisions of sub-section (7) of section 260A of the Income-tax Act. 
55. In so far as the Income-tax Act is concerned we say it is fortiori so for the reason that even while adopting the procedure as indicated in the Code of Civil Procedure for the purpose of disposal of a cross-objection the procedure is again made applicable in so far as, as far as may be, apply in the case of appeals under section 260A(1) and not in its entirety. 
56. As we have discussed above, if the cross-objection is not even tenable in a second appeal under section 100 of the Code of Civil Procedure, it is more so in an appeal under section 260A of the Act. It is for this reason we reject the submission of Sri Shankar, learned counsel for the assessee, that the right of cross-appeal or the right to defend an order of the Tribunal to the extent it is in favour of the respondents and which is appealed against before this court in this appeal is available to the assessee on all grounds which may be otherwise available to either answer against the assessee in appeal by the Tribunal. However, we are aware that the principles of natural justice even otherwise, would require that if a person who has obtained some benefit or relief is to be deprived of that benefit or relief he should have an opportunity to defend that possession. The minimum that is expected in law and procedure is that a person is given an opportunity before being deprived of any benefit or relief which a person had already obtained.”
28. The Karnataka High Court also struck a discordant note on the issue of whether a cross-objection would be maintainable in a second appeal by holding thus:
“79. While there are no direct or specific authorities of the Supreme Court on the question to hold that a cross-objection in terms of Order 41 rule 22 is tenable in a second appeal particularly, such a question having been not raised nor made an issue in the several authorities placed before us by the learned counsel and the other authorities, which we had occasion to refer to are only incidentally touching upon the aspect and in the wake of the provisions of Order 41, rule 22 as it occurs as part of the procedure regulating the filing of a regular first appeal, it cannot be by implication extended under order 42 to attribute a right of filing a cross-objection in a section 100 appeal also. 
80. A Single Bench decision of the Orissa High Court in the case of Sridhar Ghose v. Harimohan Sahu reported in [1964] AIR 1964 Orissa 141, while opines that a cross-objection in terms of Order 41, rule 22 is not tenable in a second appeal. A contrary view appears to have been taken in a Single Bench decision of the Kerala High Court in the case of Palasseri Velayudhan v. Palasseri Ithayi reported in [1994] AIR 1994 Ker 267, however, to the limited extent of the cross-objection also conforming to the requirements of a section 100 appeal. 
81. We have bestowed our attention to these two authorities of the Orissa High Court as well as the Kerala High Court. On an independent analysis also we find that with a second appeal being not the same as a first appeal and having regard to the provisions of section 108 of the Code of Civil Procedure, if we examine the scope of a cross-objection in an appeal against the original decree it is obvious that a provision of this nature was provided for to enable the defendant who might have suffered an adverse finding on any of the issues framed in the suit, but nevertheless the suit having been dismissed by the trial court but against which the defendant is not independently enabled to file an appeal as there is no decree suffered by the defendant, but when the failed plaintiff files an appeal and in this appeal should call in and the adverse finding recorded against the defendant by the trial court on a particular issue, then the defendant should be given an opportunity to get over the adverse finding by filing the cross-objection in the appeal preferred by the plaintiff. 
82. Such a situation can arise only in an appeal against an original decree and not in an appeal against an appellate decree. A situation of this nature gets exhausted at the first appeal stage and need not be permitted/enabled again in an appeal against an appellate decree. For this reason also, we are inclined to take a view that a cross-objection is neither expressly enabled in an appeal under section 100 of the Code of Civil Procedure nor can it be inferred by the language of rule 2 of Order 42 which enables the provisions of Order 41 and the rules therein being made applicable to the procedure required to be followed in respect of an appeal preferred under Order 42 only to the extent it permits and not in its entirely. The preponderance of judicial opinion to the effect that the cross-objection in terms of Order 41, rule 22 of the Code of Civil Procedure cannot be inferred in all situations where even a first appeal is provided against an order of the original authority is also a legal principle which weighed heavily with us in coming to the conclusion that a cross-objection is not enabled in terms rule 2 of Order 42 of the Code of Civil Procedure.”
29. Reverting then to the issue of the permissibility of a cross-objection being entertained while considering an appeal under Section 260A, the High Court held:
“83. We have also for a good measure examined the possibility of a cross objection in terms of Order 41, rule 22 of the Code of Civil Procedure being entertained in an appeal under section 260A of the Act and on such examination and we notice our examination only indicates to the contrary, that when a cross-objection is not tenable even in an appeal under section 100 of the Code of Civil Procedure, it is a fortiori so in an appeal under section 260A of the Act.
84. We find that the provisions of sub-section (7) of section 260A of the Act on which Sri Shankar, learned counsel for the assessee, has placed considerable reliance to contend that cross-objections are tenable even in an appeal under section 260A of the Act, also only enables the provisions of Code of Civil Procedure relating to the appeal to the High Court being made applicable only as far as may be and subject to the other provisions in this section or in the Act also. Sub-section (7) of section 260A of the Act figuring towards the end of the section “Expressly providing for the procedure to be followed, it should be understood to be only in respect of the procedural aspects of Order 42 that is made applicable and even there to the extent it may be made applicable. While even in Order 42 not all provisions of Order 41 are made applicable, the scope of the provisions of Order 42 are being made applicable to an appeal under section 260A of the Act should necessarily be read as a provision in providing for creating substantive rights. A right of appeal under section 260A of the Act is governed by sub-sections (1) to (6). 
85. The scope of an appeal is that the order appealed against should involve a substantial question of law and of course such question having been decided erroneously by the Tribunal should warrant interference by the High Court in the appeal. 
86. For the purpose of disposing of an appeal under section 260A of the Act, the High Court being satisfied that the appeal which involve substantial question of law in the course of passing of the order by the Tribunal which is appealed against such question is to be formulated and at the time of hearing of the appeal, the hearing should be restricted only to such questions which have already been formulated and notified. While it is open to the respondent even to urge that the question does not even arise. It is obvious that the respondent can join issue on the merits to defend the order. The enabling provision of the proviso to subsection (4) does permit the High Court to formulate additional questions and not so formulated in the beginning but even it is found that such additional question arise or involved in the decision of the Tribunal appealed against. It is of some significance to investigate that the decision of the High Court in an appeal under section 260A should be based only on the answer given to the questions of law formulated and examined and not based on any other considerations. When such are the restrictions imposed on an appeal under section 260A of the Act, it is rather difficult to accept the submission that a substantive right like a cross-objection which is nothing but a right of appeal in favour of the respondent can be inferred only because of the language of sub-section (7) of section 260A of the Act. 
87. We are of the considered opinion that even if a cross-objection is possible or permitted and assuming on such premise also cross-objection is definitely not permissible under section 260A of the Act based only on the language of sub-section (7) of section 260A and in the absence on any express enabling provision creating a right of cross-objection. It is on an over all examination of all these aspects, we hold that a cross-objection is not permitted in an appeal under section 260A of the Act.”
30. In our considered opinion, the question which stands posited for our consideration would have to be firstly and independently answered, bearing in mind the nature of the remedy that the Act creates and the language in which Section 260A stands couched. The said provision is extracted hereinbelow:
“260A. Appeal to High Court.—(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal before the date of establishment of the National Tax Tribunal], if the High Court is satisfied that the case involves a substantial question of law.
(2) The Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such] appeal under this sub-section shall be—
(a) filed within one hundred and twenty days from the date on which the order appealed against is received by the assessee or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner;
(b)  [* * *]
(c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved.
(2-A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.
(3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.
(4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question:
Provided that nothing in this