Reference of questions of law under tax procedure allowed only for the third proposed question; two others rejected.

A reference application under section 256(2) of the Income-tax Act was examined to determine whether three proposed questions arose from the Tribunal's order. The High Court found that questions 1 and 2 did not disclose referable questions of law and that the Tribunal's view on those points required no reference. Question 3, however, was considered to satisfy the statutory requirements for reference and was directed to be stated for the High Court's opinion. The result was a partial reference, with only the third question admitted.

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Issues: Whether the three proposed questions arising from the Tribunal's order were fit to be referred for the opinion of the High Court, and whether only the third question satisfied the requirements for reference.

Analysis: The Revenue sought a direction under section 256(2) of the Income-tax Act, 1961 to refer three questions. The Court found that questions 1 and 2 did not give rise to referable questions of law arising from the Tribunal's order and that the Tribunal's view on those questions was unobjectionable. The Court, however, held that question 3 did merit reference.

Conclusion: Questions 1 and 2 were declined, while question 3 was directed to be stated for the opinion of the High Court.

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