Quasi-penal tax provision applied on penalty findings; no referable question of law arose for reference jurisdiction.

Section 104 of the Income-tax Act was treated as quasi-penal, so the factual findings that no deliberate concealment or inaccurate particulars were established in penalty proceedings governed its application to the unexplained cash credit addition. On that factual basis, the amount could not be differently treated for section 104 purposes, and the matter did not raise a referable question of law under section 256(2). No reference was required.

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Issues: Whether the amount treated as unexplained cash credits could be taken into account for the purpose of section 104 of the Income-tax Act, 1961, and whether any question of law arose warranting a reference under section 256(2).

Analysis: The Tribunal had declined to impose penalty on the footing that deliberate concealment of income or furnishing of inaccurate particulars was not established. On that factual basis, the addition of Rs. 55,000 to the assessee's total income could not be treated differently for the purpose of section 104, which is quasi-penal in character. The conclusion that the amount could not be taken into account was reached on the facts of the case, and did not give rise to a referable question of law.

Conclusion: No question of law arose, and the High Court was not required to call for a reference under section 256(2).

Ratio Decidendi: Where a statutory provision is quasi-penal in nature, the factual findings governing penalty proceedings may equally govern its application, and a purely factual conclusion does not constitute a question of law for reference jurisdiction.

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