Reference questions may be reframed to capture their full scope and effect in income-tax proceedings.

In a reference under section 256(1) of the Income-tax Act, the Delhi HC held that it may reframe a referred question to bring out its full scope and effect. The Court treated the existing question as wide enough to cover the substance of the Department's proposed addition and found no prejudice in doing so. The ruling confirms that, where necessary, the reference court can clarify the formulation of the question so that the real controversy is properly addressed.

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Issues: Whether, in a reference under section 256(1) of the Income-tax Act, 1961, the Court can reframe the question so as to bring out its full scope and effect and include the matter sought to be covered by the proposed question.

Analysis: The Court held that it is open to the Court hearing a reference under section 256(1) to reframe the question whenever necessary to bring out its full scope and effect. The already referred question was considered wide enough to include the substance of the Department's proposed addition, and the Court found that no prejudice would be caused by such treatment.

Conclusion: The Court answered the issue in the affirmative and upheld the framing of the question as sufficient to cover the additional aspect sought by the Department.

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