S.P.Goyal, J.

1. The Income-tax Appellate Tribunal, Chandigarh Bench, vide order dated June 23, 1975, has referred the following two questions (question No. 1 at the instance of the revenue and question No. 2 at the instance of the assessee) to this court under Section 256(1) of the I.T. Act, 1961 (hereinafter called " the Act "):

" (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Inspecting Assistant Commissioner of Income-tax was not legally competent to pass the penalty order ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the penalty order made by the Inspecting Assistant Commissioner of Income-tax was within time ? "

2. In response to a notice under Section 148 of the Act, the assessee filed the return on June 17, 1968, showing an income of Rs. 7,094. The ITO, however, after necessary proceedings, assessed the income at Rs. 22,140 on February 9, 1970, and issued notice to show cause as to why penalty may not be imposed for concealment of income. He referred the matter to the IAC on February 20, 1970, for the imposition of the penalty because