Reference under section 256(2) unavailable when the Tribunal recalls its order and the matter remains pending for fresh hearing.

No direction for reference under section 256(2) was warranted where the Tribunal had recalled its earlier order, including the order condoning delay, and had posted the matter for fresh hearing. Once the earlier order ceased to operate finally and the proceedings remained pending before the Tribunal, the reference application became infructuous. A reference cannot be compelled at that stage because there was no subsisting final order to be referred for adjudication.

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Issues: Whether a direction could be issued under section 256(2) of the Income-tax Act, 1961, to refer the proposed questions when the Tribunal had recalled its earlier order and the matter was pending before it.

Analysis: The Tribunal had recalled its earlier order by which delay had been condoned and had directed the matter to be posted for fresh hearing. In that situation, the order against which reference was sought was no longer operating finally, and the reference application was treated as infructuous. Since the proceedings remained pending before the Tribunal, there was no basis for directing a reference of the questions at that stage.

Conclusion: No direction for reference under section 256(2) was warranted.

Ratio Decidendi: A reference cannot be compelled under section 256(2) when the order sought to be referred has been recalled and the matter is still pending for fresh disposal before the Tribunal.

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