JUDGMENT A.R. Tiwari, J. 1. The applicant (Commissioner of Income-tax, Bhopal) has filed this application under Section 256(2) of the Income-tax Act, 1961 (for short the "Act"), seeking a direction to the Tribunal to state the case and refer the proposed question, as extracted below, on rejection of the application registered as R, A. No. 273/Ind. of 1992 for the assessment year 1979-80, arising out of the order dated July 17, 1992, passed by the Tribunal in I.T.A. No. 47/Ind. of 1987 for our consideration and opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling penalty levied under Section 273(2)(aa) of the Act ?" 2. Briefly stated, the facts of the case are that the Assessing Officer levied penalty of Rs. 18,00,000 under Section 273(2)(aa) of the Act for the assessment year 1979-80, which was cancelled in appeal by the Commissioner of Income-tax (Appeals). The Revenue then filed an appeal before the Tribunal. The Tribunal found as a fact that the Department failed to establish that the estimate of advance tax filed by the assessee was untrue to the knowledge and belief of the assessee. The difference was found to be mainly on account of a disputed claim under Section 80J of the Act for the earlier assessment years 1974-75 to 1978-79 aggregating to Rs. 1,01,76,469. The first appellate authority on an appreciation of facts found that various adjustments made by the assessee against its income for the instant assessment year were bona fide and the claim for set off of the business losses of the earlier years and the deductions claimed under Section 80J were also bona fide. The Tribunal, therefore, dismissed the appeal. Dissatisfied, the applicant filed an application under Section 256(1) of the Act which was rejected. Thereafter, the applicant filed this application under Section 256(2) of the Act. 3. We have heard Shri D. D. Vyas, learned counsel for the applicant, and Shri S. C. Goyal, learned counsel for the non-applicant. 4. The Tribunal, therefore, dismissed the appeal. Dissatisfied, the applicant filed an application under Section 256(1) of the Act which was rejected. Thereafter, the applicant filed this application under Section 256(2) of the Act. 3. We have heard Shri D. D. Vyas, learned counsel for the applicant, and Shri S. C. Goyal, learned counsel for the non-applicant. 4. The first appellate authority, in appeal No. IT/94/86-87/3 98, decided on October 30, 1986, held as under : " Since there is no material to indicate that the estimate was not an honest and fair estimate, and since in the light of the above it is clear that there was no conscious or deliberate furnishing of an untrue estimate in view of the highly debatable matter regarding the claim for Section 80J and the judicial decisions available as on the date of the filing of the estimate relating to the Appellate Assistant Commissioner's order for the assessment year 1974-75, I hold that the provisions of Section 273(2)(aa) are not attracted in this case and the penalty deserves to be deleted. Accordingly, I delete the penalty of Rs. 18,00,000 imposed by the Inspecting Assistant Commissioner (Appeals) under Section 273(2)(aa) of the Act. In the result, the appeal is allowed." 5. The Tribunal concurred with the conclusion reached by the first appellate authority. 6. The aforesaid conclusion is based on an appreciation of facts. Nothing is urged to show that there was an untrue estimate or an element of mens rea. 7. In CIT v. Ashoha Marketing Ltd. [1976] 103 ITR 543 (SC) and CIT v. Kotriha Venkataswamy and Sons [1971] 79 ITR 499 (SC), it is held that a conclusion based on appreciation of facts does not give rise to any referable question of law. 8. On our consideration, we find that the first appellate authority was justified in cancelling the penalty and the Tribunal was also right in upholding that order. 9. This case, therefore, does not involve any referable question of law as the conclusion is based on an appreciation of facts. 10. In the result, we dismiss this application as meritless, but without any orders as to costs. Counsel fee for each side is, however, fixed at Rs. 750, if certified.