Referable question of law depends on record-based facts, and no case is stated when factual appreciation controls the dispute.

A reference under section 256(2) is not warranted where the Tribunal's refusal to state a case turns on material already on record and on factual appreciation of an admitted position. The dispute concerned whether interest liability had crystallised in an earlier assessment year, making the later claim unavailable, and whether rectification under section 154 was relevant on those facts. As the controversy depended on the contents of the record rather than on a disputed question of law, no referable question of law arose. The request for a direction to state a case was therefore refused.

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Issues: Whether a direction could be issued under section 256(2) of the Income-tax Act, 1961, when the Tribunal's refusal to refer turned on facts already forming part of the record and on the assessee's entitlement to rectification under section 154.

Analysis: The dispute arose from the Tribunal's conclusion that the liability for interest had crystallised in an earlier assessment year and that the later claim could not be entertained in the subsequent year. The Revenue sought a reference on the footing that a question of law arose, but the material on which the Tribunal acted was already part of the record and the basis for rectification was an admitted fact. Where the controversy depends upon the contents of the record and upon factual appreciation, no referable question of law arises for the purpose of section 256(2).

Conclusion: No question of law arose from the Tribunal's order, and the request for a direction to state a case was rightly refused.

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