Binding High Court precedent closed the issue on taxability of refunded amounts, so no referable question of law survived.

Binding jurisdictional High Court precedent on the taxability of refunded amounts after retrospective validation left no referable question of law under section 41(1) of the Income-tax Act, 1961. The Tribunal had deleted the addition on the view that the refunded market-fee amount could not be taxed until the assessee succeeded in challenging the validating Ordinance or later Act. On reference, that controversy was treated as concluded by the existing High Court ruling on the effect of a validating enactment on the same type of liability. The reference application was therefore correctly declined.

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Issues: Whether a question of law arose from the Tribunal's order so as to warrant a reference under section 41(1) of the Income-tax Act, 1961, in view of the binding High Court precedent on the taxability of refunded amounts after retrospective validation.

Analysis: The Tribunal had deleted the addition on the footing that the refunded market-fee amount could not be taxed under section 41(1) until the assessee successfully challenged the validating Ordinance or the subsequent Act. The application for reference was examined against the settled position that, where the jurisdictional High Court has already ruled on an identical legal issue, the matter stands concluded and no referable question of law survives. The cited High Court decision on the effect of a validating enactment on a refunded tax liability was treated as directly covering the controversy.

Conclusion: No question of law arose for reference, and the reference application was rightly declined.

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