( 1 ) THE Income-lax Appellate Tribunal, Allahabad Bench, has referred to this court for its opinion the following question :

"whether, on the facts and in the circumstances of the case, the Appellate Tribunal was legally justified in cancelling the penally imposed by the Inspecting Assistant Commissioner after April 1, 1971 (1976?), i. e. , on February 9, 1977 ?"

( 2 ) THE relevant assessment year in regard to the penalty proceedings was 1972-73. The facts giving rise to the penalty proceedings, in a nutshell, are that the assessce had claimed development rebate and depreciation on machinery which was alleged to be installed by the assessee, but the Income-tax Officer had rejected the claim of the assessee and consequently penalty proceedings were initiated. The order of imposition of penalty was passed on February 9, 1977. The Tribunal in referring the aforesaid question to this court has placed reliance on a decision of a Division Bench of this court in CIT v. Om Sons [1979] 116 ITR 215. In that case, for the assessment year 1969-70, while computing the assessment, the Income tax Officer initiated proceedings under Section 271 (1) (e) of the Income tax Act and refer