Refusal to summon relevant evidence in reassessment can turn factual disputes into questions of law requiring reference.

Refusal to summon relevant account books and witnesses in a reassessment under section 34 of the Indian Income-tax Act, 1922, may convert an apparently factual dispute into a question of law where the assessee is denied a fair opportunity to prove the source of disputed deposits or investments. On the stated reasoning, disregard of material evidence affected the adjudication of the additions and the applicability of section 34(1)(a), so the proposed issues were not confined to pure questions of fact. The Tribunal was therefore required to refer the framed questions of law to the High Court for opinion.

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Issues: Whether the Tribunal was justified in law in holding that the assessee had not fully and truly disclosed all material facts necessary for assessment and in invoking section 34(1)(a) so as to reopen the assessment after the expiry of four years, and whether the questions relating to the additions of Rs. 47,000 and Rs. 35,860 were questions of law requiring reference.

Analysis: The assessment had been reopened under section 34 of the Indian Income-tax Act, 1922, after the assessee's explanations regarding deposits and investments were rejected. The assessee had sought summoning of relevant account books and witnesses under section 37, but the request was refused. The Tribunal's own reasoning showed that the refusal to summon evidence had affected the adjudication on the nature and source of the disputed amounts. Where relevant material is not considered, and the assessee is denied an effective opportunity to prove his case, the resulting finding is not confined to a pure question of fact. On that basis, the questions concerning the additions of Rs. 47,000 and Rs. 35,860, and the applicability of section 34(1)(a), assumed the character of questions of law.

Conclusion: The Tribunal was not justified in treating the proposed questions as mere questions of fact, and the assessee was entitled to have the consolidated questions referred to the High Court.

Final Conclusion: The petition succeeded and the Tribunal was directed to refer the framed questions of law for opinion, with the matters to be heard together with the connected reference.

Ratio Decidendi: Where refusal to summon relevant evidence or disregard of material considerations affects the determination of reassessment issues, the resulting challenge may raise a question of law warranting reference.

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