No question of law arises where trust genuineness is purely factual, so reference jurisdiction cannot be invoked.

The dispute before the Tribunal concerned only the genuineness of a trust and was decided on facts alone, with no legal principle requiring application. In that situation, no question of law arose from the Tribunal's order, so the condition for invoking the High Court's reference jurisdiction under section 256(2) of the Income-tax Act, 1961 was not met. The Supreme Court held that the High Court's direction for a reference was unsustainable and set it aside, with the Revenue's section 256(2) application dismissed.

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Issues: Whether any question of law arose from the Tribunal's order when the dispute concerned only the genuineness of the trust, so as to justify the High Court's direction under section 256(2) of the Income-tax Act, 1961.

Analysis: The dispute before the Tribunal was confined to the genuineness of the trust and turned on facts alone. No legal principle was required to be applied at any stage for deciding that question. In such a situation, the condition for invoking the High Court's reference jurisdiction under section 256(2) was not satisfied, because no question of law arose out of the Tribunal's order.

Conclusion: The order of the High Court directing a reference was unsustainable and was set aside. The Revenue's application under section 256(2) stood dismissed.

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