Nazir Ahmad, J.

1. A statement of the case has been submitted by the Income-tax Appellate Tribunal, "B" Bench, Patna (hereinafter referred to as the Tribunal), under Sec.256(2) of the Income-tax Act, 1961 (hereinafter referred to as the Act), referring the following question as directed by this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the penalty of Rs. 15,000 imposed under Sec.271(1)(c) of the Income-tax Act ?"

2. The relevant facts of the case may be culled from the statement of the case as well as from the orders of the Income-tax Officer, the Inspecting Assistant Commissioner of Income-tax and the Tribunal. The assessment year involved is 1958-59. For the assessment year 1958-59 the Income-tax Officer originally completed the assessment under Sec.23(3) of the Indian Income-tax Act, 1922 (hereinafter referred to as the old Act). The assessee returned a loss of Rs. 30,519. The Income-tax Officer calculated the loss at Rs. 33,608, which was unabsorbed depreciation which was to be carried forward. This assessment was made on February 19, 1959. The .assessment order has been annexed and has been marked as annex