( 1 ) THE Income-tax Appellate Tribunal, Allahabad Bench, Allahabad (hereafter "the Tribunal"), has referred the following questions for the opinion of thiscourt under Section 256 (1) of the I. T. Act, 1961 (hereafter "the Act") :

"1. Whether, on the facts and in the circumstances of the case, the assessee had discharged the onus under the Explanation to section 271 (1) (c) of the I. T. Act, 1961 ?

( 2 )

Whether, on the facts and in the circumstances of the case, the Tribunal was in law justified in cancelling penalties of Rs. 26,000, Rs. 1,49,000 and Rs. 8,000 imposed by the Inspecting assistant Commissioner under section 271 (1) (c) of the I. T. Act, 1961, in the assessment years 1967-68, 1968-69 and 1969-70 ?"

2. The respondent-assessee, M. Habibullah, is an individual and a non-resident. He had not filed any return of income for the assessment years 1967-68 to 1969-70, On receipt of information that there were a large number of deposits in the bank accounts of the assessee, the ITO took action under Section 147 (a) of the Act for these three years. Notices were issued to the assessee and he filed returns showing his income at nil. During the course of assessment, the I