JUDGMENT :

R.N. Misra, J. - On being moved u/s 250(2) of the Income Tax Act of 1961 (hereafter referred to as "the Act'') this court called upon the Cuttack Bench of the Income Tax Appellate Tribunal to state a case and refer the following common question for the opinion of the court:

" Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the Appellate Assistant Commissioner in the matter of deletion of penalty u/s 271(1)(a) of the Act?"

2. The assessee is a firm and the relevant years of assessment are 1968-69 and 1969-70. Returns for the respective years were due by September 30, 1968, and September 30, 1969. The assessee had filed both the returns on March 23, 1971. The ITO, therefore, initiated proceedings u/s 271(1)(a) of the Act and called upon the assessee to show cause why it may not be penalised for delayed filing of returns. On the date appointed by the ITO there was no explanation and the ITO, therefore, proceeded to impose penalty for both the years. The assessee appealed and before the AAC offered its explanation for non-submission of the returns within the time allowed by law. The AAC accepted the explanation as