Referability of post-reference questions: new legal issues arising from Tribunal's order may be referred again for judicial determination.

Whether questions of law arising from an Appellate Tribunal order made under its appellate power to give effect to a prior reference judgment are referable afresh: the paper clarifies that where the Tribunal, acting after receiving a higher court's directions, frames new questions of law that were not raised or considered in its original order, those new questions may be referred again under the statutory reference procedure; conversely, questions already considered in the first Tribunal order and not referred cannot be re agitated by a later reference. The operative effect is preservation of referability for newly emergent legal issues while barring re litigation of previously decided points.

---

---

Issues: Whether a further reference under section 66(1) or section 66(2) of the Income-tax Act lies to the High Court in respect of a question of law arising out of an order passed by the Appellate Tribunal under section 33(4) in consequence of the High Court's directions under section 66(5) (i.e., whether questions of law arising from the Tribunal's post-reference order are referable to the High Court).

Analysis: The scheme of the Income-tax Act establishes that orders of the Appellate Tribunal under section 33(4) are final except insofar as a reference is made to the High Court under section 66. When the High Court decides a question of law on a case stated under section 66 and sends its judgment to the Tribunal under section 66(5), the Tribunal must pass such orders as are necessary to dispose of the case conformably to that judgment; in doing so the Tribunal exercises its appellate powers under section 33(4) and remains bound to give both parties an opportunity of being heard. Questions of law which were not raised or considered in the Tribunal's original order but which arise out of the Tribunal's subsequent order made to give effect to the High Court's decision are capable of being raised afresh and referred to the High Court under section 66(1) or section 66(2). Conversely, questions already considered in the first Tribunal order and not referred are barred from being re-agitated by a subsequent reference.

Conclusion: The Court holds that a question of law which arises out of an order passed by the Appellate Tribunal under section 33(4) in consequence of the High Court's directions under section 66(5), and which was not open or considered in the Tribunal's original order, is referable to the High Court under section 66(1) or section 66(2). The learned Judge below was right and the appeal is dismissed; outcome is in favour of the assessee.

Ratio Decidendi: Where a High Court under section 66 decides questions of law and the Appellate Tribunal thereafter reconsiders the appeal under section 33(4), new questions of law arising from the Tribunal's post-reference order (not previously considered) are referable to the High Court under section 66.

---