K.C. Agrawal, CJ.-The Income-tax Appellate Tribunal has referred under Section 25 6(1) of the Income-tax Act, 1961(for short “the Act”), the following question:

“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no penalty can be levied, as the Income-tax Officer initiated penal action in the course of reassessment proceedings in connection with the regular assessment as contemplated by Section 273 of the Act of 1961?”

2. Theoriginal assessment was made on December 5, 1974, on a total income of Rs. 10,471. Thereafter, proceedings under Section 147 of the Income-tax Act, 1961, were initiated in which the assessment was made on a total income of Rs. 60,437. Simultaneously, proceedings under Section 273(b) of the Act were started during the reassessment proceedings for the assessee’s failure to file proper advance tax estimates to be made in view of Section 212(3) and pay tax accordingly. The assessee contended before the Income-tax Officer that the penal proceedings could not be initiated in reassessment proceedings. He did not accept the arguments of the assessee and imposed penalty of Rs. 3,000. On appeal, the Appellate A