Referable question of law under section 256(2) found to arise from Tribunal's order on appeal setting aside the CIT(A) order.

A question of law under section 256(2) of the Income-tax Act was found to arise where the Tribunal had set aside the entire order of the Commissioner of Income-tax (Appeals). The Court held that, in view of the grounds raised before the Tribunal and the facts and circumstances of the case, the proposed question was referable from the Tribunal's order. The statutory requirement for directing a reference was therefore satisfied, and the Tribunal was directed to state the case and refer the question to the Court.

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Issues: Whether the Tribunal erred in setting aside the entire order of the Commissioner of Income-tax (Appeals), and whether the proposed question of law arose out of the Tribunal's order so as to justify a reference under section 256(2) of the Income-tax Act, 1961.

Analysis: The application was under section 256(2) of the Income-tax Act, 1961. The Court held that, on the facts and in the circumstances of the case and having regard to the grounds raised before the Tribunal, the question whether the Tribunal was justified in setting aside the entire order of the Commissioner of Income-tax (Appeals) did arise from the Tribunal's order. Since the issue involved a referable question of law, the statutory requirement for directing a reference was satisfied.

Conclusion: The question of law was held to arise, and the Tribunal was directed to state the case and refer the question to the Court.

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