Penalty reference under tax law refused where revised returns and alleged concealment raised factual, not referable, questions.

Penalty under section 271(1)(c) and the effect of revised returns filed before notice under section 148 were treated as issues turning on appreciation of evidence and timing, not on any referable question of law. The proposed questions about the justification for penalty and the character of the alleged concealment were therefore held to be factual in nature, so the Tribunal was right in refusing a reference under section 256(2). The assessee's application for reference was rejected on those questions.

---

---

Issues: Whether the assessee was entitled to a reference under section 256(2) of the Income-tax Act, 1961 on the proposed questions relating to the levy of penalty under section 271(1)(c), including the effect of revised returns filed before service of notice under section 148 and the character of the alleged concealment.

Analysis: The application was confined to whether the declined questions were referable questions of law. The court held that the proposed questions on the justification of penalty in the light of the evidence and the timing of the revised returns were essentially questions of fact and did not raise a referable question of law. On that basis, the Tribunal was held to have been right in refusing the reference on those questions.

Conclusion: The application under section 256(2) was rejected and the assessee was denied reference on questions 1 and 2.

---