Reference under section 66(2) is barred when the questions are already identical to earlier years and no fresh legal merit is shown.

A reference under section 66(2) of the Indian Income-tax Act, 1922 was not justified where the questions of law were substantially identical to those already considered in earlier assessment years. The Tribunal had consistently taken the same view, and the Commissioner's earlier attempts to obtain a reference under section 66(1) had failed. The Supreme Court held that the High Court should not reopen the matter through section 66(2) in the absence of any substantial legal merit in the request, and the High Court's order directing the reference was set aside in favour of the assessee.

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Issues: Whether the High Court was justified in directing a reference under section 66(2) of the Indian Income-tax Act, 1922 on questions of law that were substantially identical to those already considered in earlier assessment proceedings.

Analysis: The assessments in question raised the same legal controversy that had already arisen for earlier assessment years. The Tribunal had consistently taken the same view, and the Commissioner's attempts to obtain a reference under section 66(1) had failed. The Court found no merit in reopening the matter through section 66(2), as the questions sought to be raised were substantially the same as those previously considered and there was no justification for the High Court to call for a reference.

Conclusion: The High Court was not justified in accepting the Commissioner's application under section 66(2); the appeals were therefore allowed and the order of the High Court was set aside, in favour of the assessee.

Ratio Decidendi: A reference under section 66(2) of the Indian Income-tax Act, 1922 is not warranted where the questions are substantially identical to those already considered and no substantial legal merit is shown in the request for reference.

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