(Appeal by special leave from the judgment and order, dated October 11, 1999 of the Madhya Pradesh High Court in I.T.A. No.7 of 1999).

Income‑tax‑‑‑

‑‑‑‑Appeal to High Court‑‑‑Substantial question of law‑‑‑Reference called for by High Court for earlier year on identical issue‑‑‑Appeal to High Court in subsequent year on same point‑‑‑High Court ought to hear appeal on merits‑‑‑Indian Income Tax Act, 1961, Ss.256 & 260A.

Where for an earlier year the High Court had called for a statement of case under section 256(2) of the Income Tax Act, 1961, on an identical issue, but for a later year the High Court dismissed the appeal of the Department under section 260A based on the same point of law, on the ground that no substantial question of law arose, the Supreme Court, on appeal, restored the appeal under section 260A to the file of the High Court for disposal on the merits.

K.N. Raval, Additional Solicitor‑General of India (Ashok Shrivastava, B.V. Balarani Das and Ms. Sushma Suri, Advocates with him) for Appellant.

Joseph Pookkatt and Prashant Kumar, Advocates for Respondent.

ORDER

Leave granted.

By the order under challenge the High Court declined to entertain the appeal in respect of the following question:

"Whether, on the facts and in the circumstances of the case and in law, the Income‑tax Appellate Tribunal was justified in law in upholding the decision of the learned Commissioner of Income‑tax (Appeals) deleting the addition of Rs.3,12,589 even when the decision relied on by the Commissioner of Income tax (Appeals) were not accepted by the Department and R.A. under section 256(2) stood admitted by the High Court for the assessment year 1986‑87 on the issue under consideration?"

The High Court was of the view that no substantial question of law arose. The High Court had, on an application by the Revenue under section 256(2) of the Income‑tax Act, called upon the Tribunal to refer to it the identical issue in respect of a previous year. It is fairly stated, in the circumstances, that this appeal should be allowed, the order under challenge should be set aside and the appeal (I.T.A. No.7 of 1999) restored to the file of the High Court to be heard and disposed of on merits alongwith the income‑tax reference, I.T.R. Nos.40, 42, and 43 of 1995).

It is so ordered.

No order as to costs.

M.B.A./1045/FC Order accordingly