Question of law for income-tax reference requires the contention to have been raised before the Tribunal; reference was refused.

A question of law arises from a Tribunal order only when the underlying contention was raised before the Tribunal but not addressed; it does not arise where the point was neither raised nor considered. The Delhi High Court held that the petitioner seeking reference under section 256 of the Income-tax Act failed to show in the section 256(2) petition that the relevant contention had in fact been urged before the Tribunal. In view of that omission, and the Tribunal's finding that the Revenue had not been addressed on the point and that the proposed question was misconceived, no question of law emerged from the order and the request for reference was rightly refused.

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Issues: Whether a question of law arose from the Tribunal's order so as to justify a reference under section 256 of the Income-tax Act, 1961, when the petitioner had not specifically averred that the underlying contention had been raised before the Tribunal.

Analysis: A question of law may arise where a contention is raised before the Tribunal but not dealt with; it does not arise where the contention was neither raised nor considered. The Tribunal had recorded that the Revenue was not addressed on the point and that the proposed question was misconceived. In the absence of any averment in the petition under section 256(2) showing that the contention had in fact been raised before the Tribunal, the petitioner failed to dislodge the Tribunal's conclusion that no question of law emerged from its order.

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

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