Sections 257 and 258 of Income Tax Act, 1961: Supreme Court Reference and Amendment of Statement of Case
Sections 257 and 258 form part of the historical reference procedure under the Income Tax Act. Section 257 permits a direct reference by the Income Tax Appellate Tribunal to the Supreme Court in a limited class of old cases involving conflicting High Court decisions. Section 258 empowers the High Court or Supreme Court to require the statement of case to be supplemented or altered.
Section 257 - Statement of case to Supreme Court in certain cases
Section 257 applies where an application has been made under Section 256 against an order made under Section 254 before 1 October 1998. If the Appellate Tribunal considers that a conflict in decisions of High Courts exists on a particular question of law and that a direct reference to the Supreme Court is expedient, it may draw up a statement of the case and refer it through its President directly to the Supreme Court.
Essential conditions for a reference under Section 257
| Requirement | Meaning |
|---|---|
| Underlying ITAT order | The reference mechanism is tied to an order under Section 254 passed before 1 October 1998. |
| Application under Section 256 | The statutory setting is an application made under the old statement-of-case procedure in Section 256. |
| Conflict of High Court decisions | There must be a conflict in decisions of High Courts concerning a particular question of law. |
| Opinion of ITAT | The Tribunal must consider it expedient that the reference should be made directly to the Supreme Court. |
| Mode of reference | The Tribunal draws up the statement of case and refers it through its President directly to the Supreme Court. |
Section 257 is therefore a special historical provision. It is not a general right allowing every party dissatisfied with an ITAT order to seek a direct reference to the Supreme Court.
Section 258 - Power of High Court or Supreme Court to require statement to be amended
Section 258 applies when a case has been referred to the High Court or Supreme Court and the Court considers that the statement of case is not sufficient to enable it to determine the questions raised.
In such a situation, the High Court or Supreme Court may send the case back to the Appellate Tribunal and direct the Tribunal to make such additions or alterations to the statement as the Court considers necessary.
The purpose of Section 258 is procedural: it enables the Court deciding a statutory reference to obtain an adequate statement of the relevant case rather than determine the referred questions on an insufficient statement.
Relationship between Sections 256, 257 and 258
- Section 256 contains the old procedure for referring questions of law arising from qualifying ITAT orders passed before 1 October 1998 to the High Court.
- Section 257 permits the ITAT, in the specified circumstances involving conflicting High Court decisions, to refer the statement of case directly to the Supreme Court.
- Section 258 allows the High Court or Supreme Court to require additions or alterations where the statement of case is insufficient.
Position for later ITAT orders
The historical reference procedure should be distinguished from the appellate regime governing later ITAT orders. A qualifying appeal from an ITAT order to the High Court is governed by Section 260A, which applies where the High Court is satisfied that the case involves a substantial question of law. The further statutory route to the Supreme Court is dealt with by Sections 261 and 262, subject to their requirements.
Official references
For authoritative statutory material and court information, refer to the Income Tax Department, Income Tax e-Filing Portal, Income Tax Appellate Tribunal, Supreme Court of India and India Code.