Factual findings and reference jurisdiction: no question of law arises where the Tribunal's accounting findings remain unchallenged.

A reference under section 256(2) of the Income-tax Act does not give rise to a statable question of law where the Tribunal's conclusion rests on unchallenged findings of fact. The Tribunal found that the assessee had not shifted from the mercantile to the cash system of accounting, that the mercantile method continued in the relevant years, and that the disputed sum was taxed in the subsequent assessment year. The High Court stated that, on a reference based on the facts and circumstances found by the Tribunal, it must accept those findings and cannot reappraise the evidence or go behind them absent a challenge to their validity.

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Issues: Whether any statable question of law arose for reference under section 256(2) of the Income-tax Act, 1961, when the Tribunal's conclusion rested on findings of fact.

Analysis: The Tribunal had recorded factual findings that the assessee had not changed from the mercantile system of accounting to the cash system, that the mercantile method continued in the relevant years, and that the disputed sum was taxed in the subsequent assessment year. The High Court noted that, in a reference founded on the facts and circumstances of the case, it is bound by the facts found by the Tribunal and cannot reappraise evidence or go behind those findings in the absence of a challenge to their validity.

Conclusion: No statable question of law arose for reference, and the application was rejected.

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