Question of law in tax reference fails where genuineness of firm is only a factual finding.

Registration under section 26A depended on the existence of a valid and genuine partnership constituted in accordance with the instrument, and the Tribunal's finding that the reconstituted firm did not genuinely exist was supported by an admission in the sales tax renewal declaration that remained unrebutted. The High Court treated the genuineness or existence of the firm as a question of fact, and in a reference under section 256(1) of the Income-tax Act, 1961, it answers only questions of law, not pure findings of fact. No referable question of law arose, so the court declined to answer the reference.

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Issues: Whether the reference raised a question of law requiring an answer by the High Court, or whether the Tribunal's finding that no genuine firm existed was a pure finding of fact beyond advisory interference.

Analysis: Registration under section 26A depended on the existence of a valid and genuine partnership constituted in accordance with the instrument. The Tribunal's conclusion that the alleged reconstituted firm did not genuinely exist was supported by an admission in the sales tax renewal declaration, and no material was produced to explain or rebut that admission. The court treated the existence of a genuine firm as essentially a question of fact. In reference jurisdiction under section 256(1) of the Income-tax Act, 1961, the court answers only questions of law, not findings of fact or purely academic issues.

Conclusion: No question of law arose from the Tribunal's finding, and the court refused to answer the referred question.

Ratio Decidendi: In a reference under section 256(1), the High Court will not answer a question that turns solely on a factual finding, including the genuineness or existence of a firm, unless a real question of law arises.

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