Plausible explanation and no concealment meant penalty deletion raised no referable question of law.

A plausible explanation for an investment, though not accepted in assessment, was treated as sufficient to negate concealment where the Tribunal found no falsehood in the assessee's case. On those findings, the deletion of penalty under section 271(1)(c) did not suffer from perversity, and a challenge directed only against the factual conclusion could not create a referable question of law under section 256(2). The request for reference was therefore rejected.

---

---

Issues: Whether any referable question of law arose from the Tribunal's deletion of penalty under section 271(1)(c) of the Income-tax Act, 1961, so as to justify a direction under section 256(2) of the Income-tax Act, 1961.

Analysis: The explanation offered by the assessee regarding the investment was found not to be false and was regarded as plausible, though not accepted in the assessment proceedings. On those findings, no presumption of concealment of income could be drawn. The Tribunal had categorically found that there was no concealment of income, and the order deleting penalty did not suffer from perversity. A mere challenge on the ground that the conclusion was wrong on facts did not give rise to a question of law.

Conclusion: No referable question of law arose, and the request for a direction to refer the question was rejected.

---