Referable question of law cannot arise from a factual finding on concealment in income-tax reference proceedings

A finding that concealment was not proved on the facts and material on record did not, by itself, raise a referable question of law under the income-tax reference provisions. The controversy remained factual, so refusal to state a case was justified. A reference application also could not be expanded to add a jurisdictional objection that was not originally sought to be referred, because a court cannot direct reference on a different question from the one actually framed. The governing principle is that only a genuine question of law arising from the question sought to be referred is open to reference.

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Issues: (i) whether the Tribunal's finding that concealment was not proved in respect of the disputed additions raised any question of law fit for reference under the Income-tax Act; (ii) whether the reference application and the question framed could be expanded to include the Tribunal's alleged want of jurisdiction to differ from its assessment finding.

Issue (i): whether the Tribunal's finding that concealment was not proved in respect of the disputed additions raised any question of law fit for reference under the Income-tax Act.

Analysis: The matter turned on appreciation of the facts and the material on record. If the Tribunal reached a factual conclusion that there was no concealment or suppression on the facts disclosed, that conclusion did not, by itself, generate a referable question of law. The refusal to state a case was therefore justified because the controversy was essentially factual.

Conclusion: The issue was answered against the Revenue; no question of law arose from the Tribunal's factual finding.

Issue (ii): whether the reference application and the question framed could be expanded to include the Tribunal's alleged want of jurisdiction to differ from its assessment finding.

Analysis: The jurisdictional objection had not been included in the application seeking reference, and the question actually framed was confined to whether the Tribunal was justified, on the facts and circumstances, in holding that concealment was not proved. That formulation did not encompass a separate challenge to the Tribunal's power to reach a different conclusion in penalty proceedings. A court cannot direct reference on a question that was not asked to be referred.

Conclusion: The issue was answered against the Revenue; the jurisdictional contention could not be introduced through the reference proceedings.

Final Conclusion: The Tribunal's refusal to refer the questions was upheld, and the appeals failed because the dispute did not disclose a referable question of law.

Ratio Decidendi: A reference under the income-tax reference provisions lies only on a genuine question of law arising from the question actually sought to be referred, and a purely factual finding on concealment cannot be converted into a legal issue by recasting the reference application.

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