Discretionary review refusal is not referable unless a question of law arises from the review order itself.
A reference from an order under review powers lies only where a question of law arises from that very order. The Commissioner's power of review was discretionary and could be exercised on his own motion; an assessee could request reconsideration, but a refusal to reopen the matter did not, by itself, prejudice the assessee or create a referable order. Because the refusal to review did not confirm or otherwise affect any prejudicial order, no question of law arose out of the review refusal. The HC accordingly held that no reference lay and the remaining questions did not arise.
Issues: Whether a reference lay from the Commissioner's order refusing to exercise review powers under section 33, and consequently whether the subsidiary questions on notice and material evidence arose for consideration.
Analysis: The Commissioner's power of review was discretionary and could be exercised on his own motion. An assessee could invite the Commissioner's attention to a prejudicial order, but refusal to reopen the matter did not, by itself, alter the assessee's position or amount to an order prejudicial to him. The proviso to section 66(2) confined a reference from an order under section 33 to a question of law arising out of that order itself. On the facts, no such question arose from the refusal to review, and the Madras authority relied on did not apply because there was no prejudicial order confirmed or otherwise affected.
Conclusion: No reference lay from the order under section 33. The first question was answered in the negative, and the remaining questions did not arise.
Final Conclusion: The assessee failed on the preliminary jurisdictional point, with the result that the reference was not maintainable and the Revenue succeeded.
Ratio Decidendi: A reference from an order made under review powers lies only when a question of law arises out of that very order, and a mere refusal to exercise discretionary review, absent any prejudicial alteration of the assessee's position, is not referable.
TaxTMI 
AI Drafter ✕
TaxTMI 
