Referable question of law under tax reference procedure turns on factual concession disputes and record-based issues differently.

A dispute depending on whether assessee's counsel made a concession before the Tribunal was treated as a factual issue and, for that reason, questions Nos. 1 to 3 were not referable as questions of law under section 256(2) of the Income-tax Act, 1961. By contrast, the issue concerning Form No. 11-A was already part of the lower authorities' orders and the record, so question No. 4 was held to arise from the Tribunal's order and was referable. The Tribunal was directed to state the case only on question No. 4, while reference was declined on questions Nos. 1 to 3.

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Issues: (i) Whether questions Nos. 1 to 3 arising from the Tribunal's order were referable as questions of law under section 256(2) of the Income-tax Act, 1961; (ii) Whether question No. 4, relating to Form No. 11-A and its treatment in the Tribunal's order, arose from the record and was referable.

Issue (i): Whether questions Nos. 1 to 3 arising from the Tribunal's order were referable as questions of law under section 256(2) of the Income-tax Act, 1961.

Analysis: The controversy underlying these questions was whether counsel for the assessee had made a concession before the Tribunal. The Tribunal did not accept the assessee's version on that factual aspect. A dispute turning on whether a concession was made is essentially factual and does not, by itself, raise a referable question of law.

Conclusion: Questions Nos. 1 to 3 were held not to be referable.

Issue (ii): Whether question No. 4, relating to Form No. 11-A and its treatment in the Tribunal's order, arose from the record and was referable.

Analysis: Question No. 4 concerned Form No. 11-A, which had already been discussed in the orders of the lower authorities and formed part of the record. On that basis, the question was treated as arising from the Tribunal's order and capable of reference.

Conclusion: Question No. 4 was held to be referable and the Tribunal was directed to state the case on that question.

Final Conclusion: The application succeeded only to the extent of question No. 4, and the request for reference was declined for questions Nos. 1 to 3.

Ratio Decidendi: A dispute resting on a factual finding as to whether counsel made a concession does not raise a referable question of law, but a question that arises from materials already on record and from the Tribunal's order is capable of reference under section 256(2).

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