Binding High Court precedent bars reference of a settled tax law question under section 256(1).

A question already concluded by binding Division Bench decisions of the same High Court is not a referable question of law under section 256(1) of the Income-tax Act, 1961. The Tribunal cannot take a contrary view or seek reconsideration of an issue governed by existing precedent, including the point on the Inspecting Assistant Commissioner's competence to levy penalty after deletion of section 274(2). The question was therefore not referable and was returned unanswered.

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Issues: Whether a question already covered by a binding decision of the same High Court can be referred by the Tribunal under section 256(1) of the Income-tax Act, 1961.

Analysis: The question proposed for reference concerned the competence of the Inspecting Assistant Commissioner to levy penalty under section 271(1)(c) after the deletion of section 274(2). The issue was already concluded by earlier binding Division Bench decisions of the Court. Where a binding precedent governs the point, the Tribunal has no option to take a contrary view and cannot refer the same question to the High Court for reconsideration. Such a question does not constitute a referable question of law for the Tribunal.

Conclusion: The question was not referable and was returned unanswered.

Ratio Decidendi: A question conclusively covered by a binding decision of the same High Court does not give rise to a referable question under section 256(1) of the Income-tax Act, 1961.

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