SETHURAMAN J.

This reference relates to the assessment years 1958-59 and 1959-60. There are two sets of questions for the two years. We would reproduce the questions relating to the assessment year 1958-59 as the questions for 1959-60 are identical. The relevant questions for 1958-59 are

"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee should be assessed as a non-resident for the assessment year 1958-59 ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding and had valid materials to hold that the management and control of the firm was wholly outside India during the accounting year relevant for the assessment year 1958-59 ?

3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in cancelling the penalty levied under section 271(1)(c) for the assessment year 1958-59 ?" *

It is not in dispute that the question of penalty is completely dependent upon the answer to the reference on the assessment. If the answer is favourable to the assessee, then the penalty would have to be deleted

One Subbaraya Mudaliar was c