( 1 ) THE following questions are involved in this reference under Section 256 (2) of the I. T. Act, 1961:"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in ordering the imposition of penalty on the assessee under Section 271 (1) (c) read with Section 274 of the Income-tax Act, 1961, on the annual income of M/s. Hindusthan Trading Corporation on the return filed by Sm. Bhadra Mitra ?

( 2 ) IF the answer to question No. 1 is in the affirmative, whether on the facts and in the circumstance of the case, the Tribunal was justified in confirming the quantum of penalty and dismissing the appeal? "2. The assessee is an individual and the reference relates to the assessment year 1965-66. In the return of income the assessee did not show the income from the business under the name and style of M/s. Hindusthan Trading Corporation and the capital gains from the sale of a land which stood in the name of his wife.

( 3 ) THE ITO included the income of Hindusthan Trading Corporation and also the capital gains in respect of the aforesaid in the assessment. The AAC dismissed the appeal filed by the assessee who filed a further appeal before