Penalty on inadvertent disclosure raised only factual issues, so no question of law arose for reference.

The Tribunal's findings that the assessee's wrong disclosure was inadvertent and that there was no conscious concealment of income were treated as findings of fact. The proposed reference concerned only appreciation of those facts and the consequent penalty under section 271(1)(c), so no question of law arose from the Tribunal's order. The application under section 256(2) of the Income-tax Act, 1961 was therefore rejected and the request for reference failed.

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Issues: Whether the application under section 256(2) of the Income-tax Act, 1961 was maintainable on the ground that the Tribunal's findings on inadvertent error and absence of conscious concealment gave rise to a question of law.

Analysis: The Tribunal had found that the assessee's incorrect disclosure was due to inadvertence and that there was no conscious concealment of income. The only controversy sought to be raised before the Court related to appreciation of those facts and the consequent levy of penalty under section 271(1)(c) of the Income-tax Act, 1961. Such questions were held to be questions of fact, and no question of law arising from the Tribunal's order was shown.

Conclusion: The application under section 256(2) of the Income-tax Act, 1961 was rejected and the request for reference failed.

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