RAJESH BALIA, J. - (1.) HEARD learned counsel for the Revenue. No one has appeared for the respondent in spite of service.
(2.) THE application under S. 256(2) of the IT Act, 1961, relates to asst. yr. 1977-78. The assessee has filed return in the first instance showing gross profit of Rs. 13,82,833 which disclosed gross profit rate of 15.20 per cent of its total turnover. This was far below as compared to preceding year's gross profit rate. For the asst. yr. 1976-77, the assessee has shown gross profit rate of 32.4 per cent on gross profit (sic-turnover) of Rs. 34,88,368. On being required to show cause for steep fall in the gross profit rate the assessee has filed revised return for the asst. yr. 1977-78 showing the return of Rs. 17,03,942 showing gross profit rate of 20 per cent. Simultaneously the assessee has also filed return for 1976-77 disclosing the profits of the previous assessment year at the gross profit rate of 23.86 per cent. The assessee has also stated that from 31st Dec., 1979, the firm was not in existence and it has been dissolved and thereafter a company has been formed. It is also pertinent to notice here that when the assessee has filed revised return for 1976-77 along with revised in return for 1977-78 the assessment for the year 1976-77 has already been completed. The AO completed the assessment for 1977-78 on the basis of gross profit declared by the assessee as per his revised return. The order was affirmed by the AAC. However, on second appeal before the Tribunal the Tribunal has accepted and held that since the AO has not accepted the revised return for 1976-77, the AO was not justified in accepting profit returned as per revised gross profit of the year 1977-78 and revise the gross profit to the amount of the original return. In the aforesaid circumstance, the Revenue filed the application under S. 256(1) before the Tribunal for stating the case and referring the following questions suggested by the Revenue to this Court : "(i) Whether the Tribunal was within its competence to hold that the AO could have added the sum of Rs. 3,21,109 in the asst. yr. 1977-78 only if the Department had accepted the revised trading- cum-P&L a/c in the asst. yr. 1976-78? (ii) If the answer to the above question is in the affirmative, whether IAC (Asst.) could have revised the assessment for the asst. yr. 1976-77 on the basis of revised trading-cum-P&L a/c filed by the assesses after completion of the assessment of the asst. yr. 1976-77? (iii) Whether the Tribunal was right in deleting the addition of Rs. 3,21,109 from the assessee's total income for the asst. yr. 1977-78 particularly when the assessee had itself increased its income by Rs. 3,21,109 in the revised trading-cum-P&L a/c filed by it for the asst. yr. 1977-78? (iv) Whether, on the facts and in the circumstances of the case, the Tribunal's order deleting the addition of Rs. 3,21,109 is not perverse?". The Tribunal has rejected the application by reasoning that acceptance or non-acceptance of explanation furnished by the assessee does not give rise to questions of law. Having heard learned counsel for the Revenue. We are of the opinion that the Tribunal has erred in rejecting the application under S. 256(1) because in our opinion the question No. 4 referred to above do arise out of the Tribunal's order. The other suggested questions are only different aspects of the same question. Accordingly, we allow this application and the Tribunal is directed to state the case and refer the Question No. (iv) as stated above to this Court for its decision. There shall be no order as to costs.;