Retrospective tax amendments cannot impose new deduction conditions absent clear statutory language; no referable question of law arose.

An amendment introducing clause (aa) in the Explanation after section 80HHC(4A) was stated to operate only from 1 April 1986 and not retrospectively for the earlier transaction period relevant to assessment year 1986-87. On that basis, the Tribunal treated the Revenue's challenge to the cancellation of the Commissioner's order under section 263 and the disallowance issue under section 80HHC as already covered by the existing legal position. The refusal to state a case under section 256(2) was therefore upheld, as no referable question of law arose.

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Issues: Whether the Tribunal was justified in refusing to refer a question of law under section 256(2) of the Income-tax Act, 1961, where the Revenue challenged cancellation of the Commissioner's order under section 263 and the disallowance of deduction under section 80HHC.

Analysis: The assessment year in dispute was 1986-87 and the relevant transaction period was 1 April 1985 to 31 March 1986. The amendment inserting clause (aa) in the Explanation after section 80HHC(4A) came into force only from 1 April 1986 and could not be applied retrospectively to the earlier period. In these circumstances, the Tribunal's view that the matter was already covered and did not give rise to a referable question of law was held to be correct.

Conclusion: The Tribunal's refusal to state a case was upheld and the Revenue's application under section 256(2) was rejected.

Ratio Decidendi: An amendment introducing a new condition for deduction cannot be applied retrospectively unless the statute clearly so provides, and where the issue is thus concluded by the existing legal position, no referable question of law arises under section 256(2).

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