P. B. MUKHARJI, J.

( 1 ) THE Income-tax Appellate Tribunal has referred two points of law in the following manner, for answer by this court under Section 256 (1) of the Income-tax Act, 1961:" (1) At the instance of the Commissioner of Income-tax--Whether, on the facts and in the circumstances of the case and on a proper interpretation of Section 271 (1) (iii) and Section 274 (2) of the Income-tax Act, 1961, the Tribunal was right in reducing the penalty imposed on the assessee below the minimum prescribed under Section 271 (1) (iii) of the said Act ? (2) At the instance of the assessee-Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the penalty proceedings were properly initiated and that the penalty orders passed by the Inspecting Assistant Commissioner were valid in law ?"

( 2 ) THE facts of this reference as appearing in the statement of the case may be briefly summarised as follows : The assessee is an individual. The assessment years concerned in this reference are 1955-56 to 1962-63. The original assessments for these years were completed on the basis of the returns filed by the assessee. Subsequently, some time in 1963 the

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