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Issues involved: Application u/s 256(2) of the Income-tax Act, 1961 for direction to refer a question of law arising out of the Tribunal's order in I. T. A. No. 200/ P of 1991, related to the assessment year 1987-88.
Judgment Summary: The petitioner sought direction for the Income-tax Appellate Tribunal to refer a question of law regarding the deduction under section 80HHC on counter sales to foreigners not subjected to customs clearance. The Tribunal initially rejected the application under section 256(1) stating no question of law arose from its order. The issue pertains to the interpretation of section 80HHC, specifically regarding the eligibility for deduction on counter sales in India to foreigners without customs clearance. The Court opined that the matter involves a question of law as it requires the interpretation of statutory provisions. The Court found that the Tribunal erred in not recognizing the question of law arising from its order, emphasizing that the interpretation of a statute is a question of law. The Court highlighted that the mere correctness or erroneous nature of the Tribunal's order does not preclude the reference of a legal question. Consequently, the Court allowed the application u/s 256(2) and directed the Tribunal to refer the question of law to the High Court for its opinion. The Court noted that the situations justifying refusal of such reference did not apply in this case, hence granting the petitioner's request. No costs were awarded in this matter.
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