Binding precedent defeats reference request where the tax issue was already settled by earlier High Court rulings.

A reference under section 256(2) was not warranted where the question on an addition under section 43B had already been concluded by the High Court's earlier decisions upholding the provision and construing its first proviso. The Court treated that precedent as settling the legal position and held that a question already answered by binding authority, or otherwise self-evident, does not require reference merely because it is framed as a legal issue. Admission of special leave petitions did not change the position before the High Court, and the reference request was rejected.

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Issues: Whether a reference under section 256(2) of the Income-tax Act, 1961 was warranted on the question relating to the addition made under section 43B of the Income-tax Act, 1961, despite earlier decisions of the same High Court upholding the validity and scope of that provision.

Analysis: The earlier decisions of the High Court on section 43B had already upheld its validity and interpreted the first proviso, and the Court treated that ratio as concluding the issue. It held that where the answer to a question is self-evident or already concluded by binding decision, the mere existence of a legal question does not require a reference. The fact that special leave petitions had been admitted did not alter the position for the High Court, as the matter remained concluded by its own earlier rulings.

Conclusion: The request for reference was rejected and the petition was dismissed.

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