B.R. Arora, J. - (1.) THE Revenue, by this application under Section 256(2) of the Income-tax Act, 1961, has prayed that the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, may be directed to refer the following questions bf law for the opinion of this court: "(1) Whether, on the facts and in the circumstances of the case, the order of the Income-tax Appellate Tribunal is not pervorse? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally justified in cancelling the penalty of Rs. 36,200 imposed under Section 271(1)(c) of the Income-tax Act, 1961?"
(2.) THE assessee is the registered firm dealing in country liquor. During the assessment proceedings for the assessment year 1977-78, the assessing authority noticed the cash credit in the names of five persons in the books of account of the assessee. THE assessing authority accepted the genuineness of the cash credits of Ram Narain and Ratan Lal but, however, the cash credit in favour of Om Prakash Basasr, Om Prakash Ram Swaroop and Ram Chandra were not found genuine by the assessing authority. He, therefore, made an addition of these entries in the income of the assessee. THE order passed by the assessing authority was affirmed in appeal and the addition made against the assessee was confirmed. After confirmation of this addition by the higher authority, the assessing authority initiated penalty proceedings under Section 271(1)(c) and levied the penalty of Rs. 36,200. THE penalty was confirmed in the appeal by the Commissioner of Income-tax (Appeals), Jodhpur. THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, however, by its order dated December 21, 1993, allowed the appeal filed by the assessee and cancelled the penalty levied by the assessing authority. THE Revenue thereafter moved an application under Section 256(1) of the Act before the Tribunal to refer the abovementioned two questions of law for the opinion of the High Court. THE Tribunal, by its order dated September 12, 1994, dismissed the application filed by the Revenue and refused to refer the two questions of law mentioned in the application for the opinion of the High Court with the following observation : "THE learned Departmental Representative, no doubt, urged that the findings recorded by the Tribunal give rise to the proposed question. However, we are of the view that since the Tribunal had cancelled the penalty after appreciating the evidence on record and considering the facts and circumstances of the case, its order was not perverse so as to justify reference on proposed question No. 1. Since the findings recorded by the Tribunal regarding the cancellation of penalty were essentially findings of fact, proposed question No. 2, which arises out of such findings, is also not fit for reference." We have heard learned counsel for the Revenue and gone through the judgment passed by the Tribunal as well as the reference application. After perusal of the order passed by the Tribunal, we are of the opinion that no illegality has been committed by the Tribunal in dismissing the application under Section 256(1) of the Income-tax Act, 1961. The findings recorded by the Tribunal are purely findings of fact and no referable question of law arises out of the judgment/order passed by the Tribunal. The Tribunal was, therefore, justified in refusing to refer the questions mentioned in the application. We see no merit in this application under Section 256(2) of the Act and the same deserves to be dismissed. In the result, we do not find any merit in the application under Section 256(2) of the Income-tax Act and the same is hereby dismissed.;