Judgment:
R.K. Gulati, J.
1. This is an application under Sub-section (2) of Section 256 of the Income-tax Act, 1961, at the instance of the Revenue. The only question that was canvassed before the tax authorities was whether the proceedings under Section 154 of the Act were barred by time. The Tribunalhas held in the affirmative. The Tribunal has also rejected the application under Section 256(1) of the Act. Hence, this application has been made.
2. The initial assessment order was passed on March 31, 1982. That assessment order was, admittedly, rectified by an order dated May 26, 1982. The assessment order was rectified for the second time on May 22, 1986. It is this rectification order which is the subject-matter of the controversy in the present application.
3. According to the assessee, in terms of Sub-section (7) of Section 154 of the Act, the rectification could not have been made after March 31, 1986, i.e., beyond the period of four years from the end of the financial year in which the assessment order was passed. As to what would be the effect of the first rectification order, i.e., dated May 26, 1982, and whether it would extend the period of limitation for the purposes of Sub-section (7) of Section 154 a're questions that may require consideration of this court. In our opinion, the question of law as set out below does arise from the order of the Income-tax Appellate Tribunal :
'Whether the Income-tax Appellate Tribunal was legally correct in holding that the rectification order passed on May 22, 1986, in respect of relief allowed under- Section 80J in the original assessment was barred by limitation ?'
4. Sri K.C. Srivastava, learned counsel appearing for the assessee, vehemently contended that the answer to the above question is self-evident and the question does not deserve a reference to this court. He relied upon two decisions : one of the Gujarat High Court in Ahmedabad Sarangpur Mills Co. Ltd. v. A. S. Manohar, ITO : [1976]102ITR712(Guj) and the other of the Calcutta High Court in Bengal Assam Steamship Co. Ltd. v. CIT : [1978]114ITR327(Cal) . It was contended that a similar controversy had already been answered against the Department, and, in these circumstances, no statable question of law survives. We may observe that, at this stage, we are not called upon to express any opinion on the merits of the question raised in the application. However, we feel that, if a question of law does arise, this court may not be justified in refusing to require the Tribunal to refer the case merely because the view taken by the Tribunal on the question of law is either correct or the ultimate decision upon the point of law may be in favour of the assessee. We may also not be justified in declining the reference only on the ground that the matter stands decided by one or more High Courts and the view taken by the Tribunal is in consonance with those decisions. We do not agree that no statable question of law survives.
5. For what has been stated above, we direct the Income-tax Appellate Tribunal, Delhi Bench 'E', Delhi, to draw up a statement of the case and refer the aforesaid question for the opinion of this court. There shall be no order as to costs.