Referable question of law under income tax law: High Court directs reference on four proposed questions, rejects one.

Under section 256(2) of the Income-tax Act, 1961, only questions that genuinely involve a referable question of law can be sent to the High Court. The court examined the proposed questions issue-wise and held that questions Nos. 1, 2, 3 and 5 satisfied that requirement, so a reference was directed on those questions. Question No. 4 was found not to raise a question of law fit for reference and was declined. The application therefore succeeded only in part, with reference ordered for four questions and refused for one.

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Issues: Whether a direction should issue under section 256(2) of the Income-tax Act, 1961 for reference of questions of law arising from the Tribunal's order, and whether all five proposed questions satisfied the requirement of a referable question of law.

Analysis: The petition was examined issue-wise. It was held that question No. 4 did not raise a question of law fit for reference, while questions Nos. 1, 2, 3 and 5 did raise questions of law warranting reference to the High Court.

Conclusion: A reference was directed only in respect of questions Nos. 1, 2, 3 and 5, and question No. 4 was declined.

Final Conclusion: The application succeeded only in part, securing a reference on four questions while leaving one question out of reference.

Ratio Decidendi: In proceedings under section 256(2) of the Income-tax Act, 1961, only questions that genuinely involve a question of law and are fit for reference can be directed to be referred.

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