Reference on penalty refused where concealment was not proved and the Tribunal's finding was purely factual.

A reference under section 256(2) was refused because the Tribunal's view on penalty under section 273 rested on appreciation of evidence, not on any independent question of law. The dispute depended on whether the assessee's additional income disclosure was voluntary or whether concealment had been proved, and the Department produced no material to establish concealment or coercion. As the finding was factual and the legal issue was already settled in principle, no referable question of law arose and the request to state a case was rejected.

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Issues: Whether a reference under section 256(2) of the Income-tax Act, 1961 was warranted on the question of levy of penalty under section 273, and whether the Tribunal's finding that the penalty was not leviable gave rise to any question of law.

Analysis: The dispute turned on the factual question whether the assessee's disclosure of additional income was voluntary or whether concealment had been established by the Department. The record showed no material produced by the Department to prove concealment or to show that the assessee had been cornered. The Tribunal's conclusion was based on the evidence on record, and the issue sought to be raised by the Revenue was treated as settled in principle, leaving no independent question of law for reference.

Conclusion: No question of law arose for reference under section 256(2), and the request to direct the Tribunal to state a case was rejected.

Ratio Decidendi: A reference under section 256(2) is not warranted where the impugned decision rests on appreciation of evidence and no independent question of law emerges from the Tribunal's factual finding.

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