D.S.Tewatia, J.

1. The ITO, vide his order dated 30th March, 1976, initiated penalty proceedings against the assessee-firm in view of his express finding in the assessment order of the same date that the assessee-firm had concealed certain items of income for the year 1973-74. The ITO thereafter made a reference to the IAC for imposing penalty as the amount of concealed income exceeded the sum of Rs. 25,000 in which event only the IAC had the jurisdiction to impose penalty.

2. The IAC vide his order dated 27th January, 1979, imposed a penalty of Rs. 20,500. The assessee-firm challenged his order in appeal before the Income-tax Tribunal wherein the jurisdiction of the IAC to levy penalty was questioned in view of the deletion of Section 274(2) of the I.T. Act (hereinafter referred to as "the Act"), with effect from April 1, 1976. The Tribunal dismissed the appeal holding that the IAC had the jurisdiction to levy penalty in view of the binding Division Bench judgment of this court in CIT v. Raman Industries [1980] 121 ITR 405.

3. The assessee-firm thereafter applied to the Tribunal, under Section 256(1) of the Act, to refer the following three questions for the decision of th