SRINIVASA IYENGAR, J.

( 1 ) THE Income Tax Appellate Tribunal, Bangalore Bench, has stated a case and referred the following question of law for the opinion of this court. "whether on the facts and in the circumstances of the case the Tribunal was justified in cancelling the penalty of Rs. 30,000 levied on the assesee u/s. 271 (1) (c) of the Income Tax Act, 1961 for the assessment year 1964-65?"the assessee is a firm and assessed as such. The year of account is the one ended with 30th June, 1963 and the matter relates to the assessment year 1964-65.

( 2 ) ON 6-9-1963, the Central Excise Authorities conducted a raid under the gold Control Order of the assessee's shop and also the residence of the partners. The partners were all staying together. At their residence, an amount of Rs. 1,42,000 was found. At the shop a sum of Rs. 76,970 was found. The books of account of the assessee as on 6-9-1963 showed the existence of cash of Rs. 1,37,828-84. Thus, an excess cash of Rs. 81,142 was found at the time of the raid. The explanation of theassesses in regard to this amount was that they were amounts withdrawn in the earlier years and amounts of dowry received on the occasion of the marriag

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