SETHURAMAN J.

In T.C. No. 432 of 1975, the following is the question that has been referred to this court under s. 256(1) of the I.T. Act, 1961

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in reducing the quantum of penalty levied under section 273(c) of the Income-tax Act of 1961 ?" *

In T.C. No. 433 of 1975, the following question has been referred

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that to the extent of Rs. 76, 429 the managing agency commission accrued to the assessee only after March 31, 1970, and hence was not assessable in the assessment year 1970-71 ?" *

The assessee is a private limited company. Whether the amount of Rs. 76, 429 is assessable in 1970-71 or 1971-72, is not likely to be of any consequence, because ordinarily the tax rates leviable on companies are more or less uniform, whatever be the total income of the company. However, in the present case, the question assumes some significance because of the penalty proceedings. We shall first set out the facts relating to the assessment proceedings before going into the penalty proceedings

The assessee ente