1985 (8) TMI 53

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.... No. 4645 of 1983, for compelling a reference. But that application was dismissed as the question of law raised was concluded, so far as this court was concerned, by its decision in State Bank of Travancore v. CIT [1977] 110 ITR 336. When this application came up for hearing, the counsel for the Revenue submitted that as an identical application for an earlier year was rejected, this application also has to be rejected as no question of law arises in view of State Bank of Travancore v. CIT [1977] 110 ITR 336. The Tribunal refused to refer as, in its opinion, no question of law arose after the decision in State Bank of Travancore v. CIT [1977] 110 ITR 336 when it was bound by a decision of this court. The learned counsel for the petitioner....

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....e case on the ground that no question of law arises, the assessee or the Commissioner, as the case may be, may, within six months from the date on which he is served with notice of such refusal, apply to the High Court, and the High Court may, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and to refer it, and on receipt of any such requisition, the Appellate Tribunal shall state the case and refer it accordingly". The Appellate Tribunal can refuse to state a case on the ground that no question of law arises. If the High Court, on an application by the assessee or the Commissioner, is not satisfied with the correctness of that decision of the Tribunal,....

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....ay or not. question of law supportable by reasonable arguments, an arguable question of law, is all what is required under section 256(2). In CIT v. Managing Trustee, Jalakhabai Trust [1967] 66 ITR 619, the Supreme Court held thus (at p. 622) "At this stage, we express no opinion on the correctness of that judgment. It must be pointed out that the High Court in dealing with the application under section 66(2) of the Act is not called upon to decide whether the question may ultimately be decided in favour of the assessee; the High Court had only to consider whether a question of law which may be supported by reasonable argument, arose out of the order of the Tribunal. " The view we have expressed finds support in CWT v. Sri Venkatesa Mill....