Tax reference and rectification are limited to legal error and patent mistake, not reassessment of factual findings or merits.

In tax reference proceedings, the High Court will not disturb the Tribunal's factual findings or remand directions unless they are unsupported by evidence or affected by legal misdirection, so no referable question of law arises where the challenge is essentially factual. Rectification is equally narrow: it is confined to mistakes apparent on the face of the record and cannot be used to reopen the merits of a concluded decision. On that approach, the Tribunal's refusal to seek a reference and its rejection of rectification were treated as within jurisdiction and free from legal infirmity.

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Issues: (i) Whether the Tribunal was justified in refusing to direct a reference under section 256(2) of the Income-tax Act, 1961, on the ground that no referable question of law arose from its order. (ii) Whether the Tribunal was justified in rejecting the rectification application on the ground that there was no mistake apparent from the record.

Issue (i): Whether the Tribunal was justified in refusing to direct a reference under section 256(2) of the Income-tax Act, 1961, on the ground that no referable question of law arose from its order.

Analysis: The controversy primarily turned on whether the objections raised by the assessee disclosed any real question of law or only challenges to factual findings and remand directions. The Tribunal had remanded several items because the primary facts were incomplete or required verification, and in respect of other items it had found no material basis to disturb the orders of the lower authorities. In a reference proceeding, the High Court does not reassess evidence or interfere with findings of fact unless they are unsupported by evidence or vitiated by misdirection in law. The material before the Tribunal did not show perversity in its factual conclusions or any legal error requiring reference.

Conclusion: The refusal to draw up and refer questions of law was upheld, and the assessee's challenge failed on this issue.

Issue (ii): Whether the Tribunal was justified in rejecting the rectification application on the ground that there was no mistake apparent from the record.

Analysis: Rectification is confined to obvious errors apparent on the face of the record and does not permit reopening of matters already finally decided. The Tribunal examined the appellate order and the materials placed before it and concluded that the alleged mistakes were not patent errors but matters involving reconsideration of the merits. That approach was consistent with the limited scope of rectification jurisdiction.

Conclusion: The order rejecting rectification was sustained, and the assessee's challenge failed on this issue.

Final Conclusion: Both proceedings were dismissed, as the Tribunal's orders were found to be within jurisdiction and free from legal infirmity.

Ratio Decidendi: In a tax reference, the High Court will not interfere with factual findings or remand-based adjudication unless the findings are unsupported by evidence or vitiated by a legal misdirection, and rectification is confined to errors apparent on the face of the record.

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