Reference jurisdiction limits new issues: a Tribunal order can rest on one sufficient ground despite multiple revision grounds.

A question of reference jurisdiction arose under section 256(2) where the Revenue sought to challenge a Tribunal order after revision under section 263. The High Court held that only questions of law arising from the Tribunal's order and properly raised before it can be referred, and a new point not put to the Tribunal cannot be imported into section 256(2) proceedings. It also noted that the Tribunal could rely on one sufficient ground even where the revision order mentioned multiple grounds, including surtax perquisite, exclusion of receipts, and grossing up. The Tribunal's refusal to refer the proposed question was therefore upheld.

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Issues: Whether the Tribunal was justified in holding that the Assessing Officer's order was not erroneous and in refusing a reference under section 256(2) of the Income-tax Act, 1961, despite the Commissioner's order under section 263 being founded on more than one ground.

Analysis: The reference applications arose from the Commissioner's revisionary order under section 263, which treated the assessments as erroneous and prejudicial to the interests of the Revenue on grounds relating to surtax perquisite, exclusion of certain receipts, and grossing up. The Tribunal had already examined the controversy and held that surtax was not payable in view of the exemption notification and that the question of grossing up had not been specifically raised in the section 263 notice. The High Court reiterated that, in reference jurisdiction, the material question is whether a question of law arises out of the Tribunal's order and was properly before it. A new issue not raised before the Tribunal cannot be imported into a section 256(2) proceeding. On the facts, the Tribunal had not misdirected itself in law merely because it relied on one sufficient ground while declining to treat the assessment as erroneous and prejudicial to the Revenue.

Conclusion: The Tribunal's refusal to refer the proposed question was upheld, and the Revenue's applications were rejected.

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