Penalty under section 271(1)(c) raised no referable question of law where bona fide explanation and concealment were factual findings.

Penalty under section 271(1)(c) and Explanation 1 depended on whether the assessee's explanation was bona fide and whether concealment was established. The appellate authorities accepted the assessee's explanation, and the High Court noted that this conclusion rested on factual appreciation rather than any grave error of law. As the proposed questions sought to reopen findings of fact, they did not disclose any referable question of law, and the reference application was rejected.

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Issues: Whether the questions proposed by the Revenue arising from the levy of penalty under Section 271(1)(c) of the Income-tax Act, 1961, and the applicability of Explanation 1 thereto disclosed any referable question of law.

Analysis: The additions in dispute arose partly from a voluntary disclosure by the assessee and partly from explanations furnished in respect of the remaining additions. The appellate authorities had accepted the assessee's explanation as bona fide. The determination whether the assessee's explanation was bona fide, and whether concealment was established, depended on factual appreciation. In the absence of any grave error of law, the Tribunal's conclusion on these matters did not give rise to a question of law.

Conclusion: The proposed questions were not questions of law and the application seeking a reference was liable to be rejected.

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