Question of law on reassessment against a dissolved firm required reference for High Court determination.

Where the Tribunal declined to refer whether proceedings under section 34 of the Indian Income-tax Act, 1922 could validly be initiated against a dissolved firm, the High Court treated the issue as a live question of law arising from the facts found and directed a reference. The court did not determine the merits of the reassessment notice itself; it confined itself to whether the legal question deserved consideration by the High Court. The operative effect was that the Tribunal was required to state the case and refer the framed question for determination.

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Issues: Whether the Tribunal was bound to state the case and refer the question whether initiation of proceedings under section 34 of the Indian Income-tax Act, 1922 was valid in the case of the dissolved firm.

Analysis: The petition concerned only whether a question of law arose for reference. The Court did not decide the substantive validity of the reassessment notice on merits, but found that the issue raised was a live question of law warranting consideration by the High Court. On that basis, the Tribunal was directed to state the case and refer the formulated question.

Conclusion: The question of law was held to arise and the Tribunal was required to refer it for determination.

Final Conclusion: The assessee succeeded in obtaining a reference, and the matter was sent to the High Court for decision on the framed question.

Ratio Decidendi: Where the Tribunal's refusal to refer overlooks a real question of law arising from the facts found, the High Court may direct the Tribunal to state the case and refer that question for determination.

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