( 1 ) THIS reference under Section 256 (1) of the Income-tax Act, 1961 (hereinafter called the Act) at the instance of the Department poses the following question of law for our opinion :

"whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Inspecting Assistant Commissioner had no jurisdiction to levy the penalty under Section 271 (1) (c) and thereby concelling the penalty of Rs. 5,000 ?"

( 2 ) THE facts mentioned in the statement of case lie in a very narrow compass and are these. The assessment year under reference is 1968-69 and the accounting period ended on March 31, 1968. The assessee is a lady deriving income from property, share income from the firm of M/s. Om Parkash Jitender Kumar and Company, dividends etc. In the return of income for the year under reference, the assessee did not disclose any capital gains in respect of her one-half portion in the Ghaziabad property sold for Rs. 15,000 during the relevant previous year. Her explanation was that the house in question was actually gifted to her by her mother and, therefore, its value as on January 1,. 1954 be estimated at Rs. 85,000. The Income-tax Offic