Judgment ( 1. ) THIS is an application made by the Revenue (Commissioner of Income-tax) under Section 256 (2) of the Income-tax Act, 1961, consequent upon the rejection of their application made under Section 256 (1) of the Act by the Tribunal vide order, dated November 16, 1998, passed in R. A. No. 148/ind. /98, arising out of the order dated June 25, 1998, passed by the Tribunal in I. T. A. No. 545/ind/94 in respect of the assessment year 1991-92. The applicant, i. e. , the Revenue, had sought following the three questions of law for being referred to this court by the Tribunal under Section 256 (1) of the Act. However, the Tribunal declined to refer the questions holding that the questions proposed are essentially questions of fact and hence, they cannot be said to arise out of the order passed by the Tribunal in appeal. ( 2. ) THE following were the questions proposed to the Tribunal for being referred and the same are again being proposed in this application made under Section 256 (2) ibid : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that even after filing of revised return by a offering a sum of Rs. 7,50,000 as income from other sources on account of unproved cash credits, the Revenue was required to bring material on record during penalty proceedings to show that the cash credits were not genuine and that the Supreme Court judgment in the case of G. C. Agarwal v. CIT [1990] 186 ITR 571 and the Madras High Court in the case of H. V. Venugopal Chet-tiar v. CIT [1985] 153 ITR 376 do not render any assistance to the Revenue ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no penalty under Section 271 (1) (c) can be levied in the case of the income assessed on negative figure even though Explanation 4 to Section 271 (1) provided for levy of penalty in such cases ? 3. 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no penalty under Section 271 (1) (c) can be levied in the case of the income assessed on negative figure even though Explanation 4 to Section 271 (1) provided for levy of penalty in such cases ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the decision of the M. P. High Court in the case of CIT v. Jaora Sugar Mills is applicable to the facts of the case even though Explanation 4 to Section 271 (1) has been brought on the statute with effect from April 1, 1976 ?" ( 3. ) HEARD Shri R. L. Jain, learned counsel for the applicant. ( 4. ) HAVING heard learned counsel for the parties and having perused the record of the case, we too are of the view that the questions proposed are essentially questions of fact and cannot be termed as questions of law for being referred to this court for answer. In other words, none of the questions proposed can be said to have arisen out of the order passed by the Tribunal in appeal nor can they be said to be questions of law. The Tribunal was, therefore, justified in rejecting the application made under Section 256 (1) ibid, by the Revenue. The dispute arises out of the assessment year 1991-92. It relates to imposition of penalty on the assessee under Section 271 (1) (c) of the Act. It was set aside by the Commissioner of Income-tax (Appeals) as also by the Tribunal holding that in the absence of any factual finding that the loans taken by the assessee were bogus, no penalty can be imposed. In other words, the appellate authorities, i. e. , the Commissioner of Income-tax (Appeals) and the Tribunal were of the view that in order to impose penalty, there must be a categorical finding of fact that the transaction of loan relied on by the assessee was a bogus transaction. It is only then the question of imposition of penalty may arise. We concur with the view so taken as in our opinion : it does not call for any interference. In fact, the view so taken is based on questions of fact and cannot be faulted. It is only then the question of imposition of penalty may arise. We concur with the view so taken as in our opinion : it does not call for any interference. In fact, the view so taken is based on questions of fact and cannot be faulted. In view of the aforesaid discussion, we are not able to find any case much less question of law arising out of the Tribunals order. The application is thus, liable to be dismissed. It is accordingly, dismissed.