We report on the BeppoSAX monitoring of a giant outburst of the transient X-ray pulsar XTE J1946+274 in 1998. The source was detected with a flux of ~ 4 x 10^(-9) erg cm^(-2) s^(-1) (in 0.1 - 120 keV range). The broadband spectrum, typical for accreting pulsars, is well described by a cutoff power law with a cyclotron resonance scattering feature (CRSF) at ~ 38 keV. This value is consistent with earlier reports based on the observations with Suzaku at factor of ten lower luminosity, which implies that the feature is formed close to the neutron star surface rather than in the accretion column. Pulsations with P ~ 15.82 s were observed up to ~ 70 keV. The pulse profile strongly depends on energy and is characterised by a "soft" and a "hard" peaks shifted by half period, which suggests a strong phase dependence of the spectrum, and that two components with roughly orthogonal beam patterns are responsible for the observed pulse shape. This conclusion is supported by the fact that the CRSF, despite its relatively high energy, is only detected in the spectrum of the soft peak of the pulse profile. Along with the absence of correlation of the line energy with luminosity, this could be explained in the framework of the recently proposed "reflection" model for CRSF formation. However more detailed modelling of both line and continuum formation are required to confirm this interpretation.