The court emphasized the importance of valid reasons for disallowing an application for reference and ordered the Tribunal to refer the questions to the court for opinion.

, J.

1. After going through the order of the Tribunal, we find that the following two questions are questions of law and do arise from the order of the Tribunal :

"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing deduction under Section 36(1)(ii) of bonus paid in excess of the limits prescribed under the Payment of Bonus Act, 1965 ?

2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the payment of bonus over and above the prescribed limit under the Payment of Bonus Act, 1965, is an admissible expenditure under Section 37(1) of the Income-tax Act, 1961, even though the expenditure falls under the specific Section 36 of the said Act ?"

2. The Tribunal, however, disallowed the application for reference on two grounds, namely, that the earlier Bench of three members had already settled the matter and that the questions worn covered by the Supreme Court decision in Shahzada Nand and Sons v. CIT [1977] 108 1TR 358. So far as that first ground is concerned, that would be no reason to decline the questions of law to be referred to this court. The other ground is equally not available because Shahzada Nands case [1977] 108 ITR 358 (SC) does not deal directly with the bonus question and was rendered regarding the deduction of the commission paid. So, on none of the two grounds given, the petition could be declined. Accordingly, a mandamus is ordered to be issued to the Tribunal to refer the questions referred to above together with the statement of the case for the opinion of this court.