Bona fide mistake by counsel as a factual finding meant no referable question of law arose on penalty rejection.

A Tribunal's finding that an incorrect wealth-tax return resulted from a bona fide mistake by counsel was treated as a pure question of fact. Because the rejection of penalty under section 18(1)(c) depended on that factual conclusion and no distinct legal issue emerged, no referable question of law arose under section 27. The Tribunal was therefore justified in refusing to state the case to the High Court.

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Issues: Whether, on the facts found by the Tribunal, the rejection of penalty under section 18(1)(c) of the Wealth-tax Act gave rise to any referable question of law under section 27.

Analysis: The Tribunal had accepted the explanation that the incorrect return resulted from a bona fide mistake on the part of counsel, and that conclusion was based on the factual circumstances placed before it. The character of counsel's conduct as bona fide was a pure question of fact. Since the Tribunal's finding rested on facts and no legal issue emerged from that finding, no question of law arose requiring a reference to the High Court.

Conclusion: No referable question of law arose, and the Tribunal was justified in refusing to state the case.

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