Natural justice and fresh hearing requirements defeated the reference because the issue was factual, not a substantial question of law.

Deletion of penalty under the Wealth-tax Act was examined in the context of whether the successor assessing authority had given the assessee a fresh opportunity of hearing. The Tribunal found, as a factual matter, that no notice of hearing was issued before the penalty order, leaving the assessee unable to present his case. On that basis, the Court treated the issue as one of factual appreciation rather than a substantial question of law under section 27(3), and held that no reference was warranted. The approach was consistent with natural justice, including audi alteram partem.

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Issues: Whether a question of law arose for reference under section 27(3) of the Wealth-tax Act, 1957, in relation to deletion of penalty under section 18(1)(a) on the ground that the assessee was not given a fresh opportunity of hearing by the successor assessing authority.

Analysis: The Tribunal had found as a matter of fact that no notice of hearing was given before the penalty order was passed by the successor authority, with the result that the assessee was denied an opportunity to present his case on the penalty matter. The Court held that the matter turned on factual appreciation regarding sufficiency of opportunity and did not raise any substantial question of law warranting a reference. The principles of natural justice, including audi alteram partem, supported the Tribunal's approach in the circumstances.

Conclusion: No substantial question of law arose for reference; the application was rejected.

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