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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the proposed question regarding the allowance of the alleged bad debt arose from the Tribunal's order so as to warrant a reference under section 256(2) of the Income-tax Act, 1961. (ii) Whether the proposed question based on section 155(6) of the Income-tax Act, 1961 arose from the Tribunal's order.
Issue (i): Whether the proposed question regarding the allowance of the alleged bad debt arose from the Tribunal's order so as to warrant a reference under section 256(2) of the Income-tax Act, 1961.
Analysis: The determination whether a debt has been proved to be a bad debt is a finding of fact. No legal error was shown in the Tribunal's conclusion that the assessee had failed to establish the debt as bad. A question resting only on that factual finding does not give rise to a referable question of law.
Conclusion: The first proposed question did not arise from the Tribunal's order and was not liable to be referred.
Issue (ii): Whether the proposed question based on section 155(6) of the Income-tax Act, 1961 arose from the Tribunal's order.
Analysis: Section 155(6) had no relevance to the facts of the case, and the proposed question based on that provision was not connected with the Tribunal's order.
Conclusion: The second proposed question did not arise from the Tribunal's order and was not liable to be referred.
Final Conclusion: The petition for a mandamus directing the Tribunal to state the case and refer the proposed questions was rejected, and the matter was finally disposed of against the assessee.
Ratio Decidendi: A factual finding that a debt is or is not a bad debt does not itself furnish a referable question of law, and a reference under section 256(2) cannot be compelled on a question that does not arise from the Tribunal's order.
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