1. On an application under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the

following questions for our opinion: “Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no information was given by the audit party within the meaning of Section 147(b) of the Income-tax Act and that initiation of proceedings under that provision was wholly invalid?“ “Whether, on the facts and in the circumstances of the case, the Tribunal was justified in quashing the reassessment order?“

2. Therelevant assessment year is 1972-73. The assessment was completed on February 21, 1975. After completion of the assessment order, the audit party has pointed out that Rs. 69,338 have wrongly been allowed as the amount of Rs. 69,338 has not been incurred against the payment of leave, salary and pension to the employees. When this information was passed on to the Income-tax Officer, he recorded the reasons for reopening of the assessment as under

“The local audit party has raised an objection that the assessee-company has debited the profit and loss account by an amount of Rs. 69,338 for leave, salary and pension contribution. This i