Section 35B interpretation raised a question of law, requiring reference to the High Court for opinion.

Interpretation of section 35B of the Income-tax Act, 1961 raised a question of law, so the High Court ought to have directed a reference to be drawn up and forwarded for opinion. Refusal to call for a reference on that issue was unsustainable, and the civil appeal succeeded to that extent with the question directed to be referred to the High Court.

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Issues: Whether the High Court was justified in declining to call for a reference on the question relating to weighted deduction under section 35B of the Income-tax Act, 1961.

Analysis: The question turned on the correct interpretation of section 35B and was therefore a question of law. On that footing, the High Court ought to have directed a reference to be drawn up and forwarded for opinion.

Conclusion: The refusal to call for a reference on the second question was unsustainable. The civil appeal succeeded to that extent and the question was directed to be referred to the High Court.

Ratio Decidendi: A dispute requiring interpretation of section 35B of the Income-tax Act, 1961 raises a question of law and cannot be refused reference on the ground that it is already covered by an earlier decision without judicial examination of the reference requirement.

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