2000 (9) TMI 5 - SCH - Income Tax

Supreme Court Grants Leave to Refer Tax Law Question to High Court

The Supreme Court granted leave in a case where the Tribunal declined to refer a question of law to the High Court. The Court directed the Tribunal to ... Reference of question of law under section 256 of the Income tax Act - power of the Tribunal to decline reference - question of law arises - remand for reference to High Court under section 256(2) - direction for deposit of tax deducted at sourceQuestion of law arises - power of the Tribunal to decline reference - The Tribunal was not justified in declining to refer the question of law to the High Court because a question of law does arise. - HELD THAT: - The Tribunal had refused to make a reference under section 256 on the ground that, in the facts and circumstances, no question of law would arise. The Supreme Court, on consideration of the record and submissions, concluded that a question of law does in fact arise and that the Tribunal's conclusion to the contrary was not justified. Consequently the Tribunal is directed to proceed with the formal step of framing a statement for reference to the High Court under the scheme of section 256.Answer in the affirmative: a question of law arises and the Tribunal's refusal to refer was not justified.Remand for reference to High Court under section 256(2) - direction for deposit of tax deducted at source - The specific question of law concerning the Tribunal's cancellation of the Income tax Officer's direction for deposit of TDS is to be referred to the High Court for consideration. - HELD THAT: - The Supreme Court framed the precise question of law-whether the Tribunal was justified in cancelling the Income tax Officer (TDS) direction for deposit of the TDS amount with interest-and directed the Tribunal to make a statement and refer that question to the High Court under section 256(2). The matter is thus remitted for adjudication by the High Court; the Supreme Court did not decide the substantive merits of that question but required its consideration by the High Court.The Tribunal is directed to make a statement and refer the framed question of law to the High Court for decision.Final Conclusion: The appeal is allowed; the Supreme Court held that a question of law arises, set out the question concerning the Tribunal's cancellation of the TDS deposit direction, and directed the Tribunal to frame a statement and refer that question to the High Court under section 256(2) for adjudication. The Supreme Court granted leave in a case where the Tribunal declined to refer a question of law to the High Court. The Court directed the Tribunal to refer the question regarding the cancellation of a direction by the Income-tax Officer for deposit of TDS amount totaling to Rs. 38,85,240. The appeal was allowed.