1. We have heard learned Counsel for the parties and perused the material placed before us.

2. This is an application under Section 256(2) of the IT Act, 1961. The Tribunal has found that no substantial question of law arises out of its appellate order dt. 19th Dec., 1994 by which the penalty of Rs. 1,23,062 in respect of additions made in the assessment had been deleted.

3. In thefacts and circumstances of the case, we are satisfied that the substantial questions of law do arise out of Tribunal’s order dt. 11th July, 1995, and the finding of the Tribunal that no substantial question of law arises out of its appellate order dt. 19th Dec., 1994 is erroneous and the application deserves to be allowed.

4. According to the applicant--the CIT, following substantial questions of law do arise out of Tribunal’s order:

“(1) Whether, on the facts and in the circumstances of the case, the learned Tribunal is legally justified in cancelling the penalty of Rs. 1,23,062 imposed under Section 271(1)(c)?

.(2) Whether the Tribunal is right in cancelling the penalty under Section 271(1) (c) by entertaining a fresh plea of the assessee which was never taken before the authorities below?

(3)