Penalty for concealment and reference on a question of law under the Income-tax Act was directed to be stated by the Tribunal.

A question of law arose from the Tribunal's refusal to make a reference under section 256(2) of the Income-tax Act on the assessee's exposure to penalty for concealment under section 271(1)(c). The High Court found that, on the facts and circumstances, whether failure to substantiate deductions amounts to concealment of particulars of income was a referable legal issue. It therefore required the Tribunal to state the case and refer the question to the Court.

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Issues: Whether a question of law arose from the Tribunal's order so as to warrant a reference under section 256(2) of the Income-tax Act, 1961 on the assessee's liability to penalty for concealment under section 271(1)(c).

Analysis: The application concerned the Tribunal's refusal to make a reference on the ground that no question of law arose. The Court held that the issue whether failure to substantiate deductions amounts to concealment of particulars of income, attracting penalty under section 271(1)(c), did arise on the facts and circumstances of the case.

Conclusion: The Court answered the reference issue in the affirmative and directed the Tribunal to state the case and refer the question of law to the Court.

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