Satish Chandra, C.J.

1. THE questions of law which have been referred by the Tribunal for our opinion are as follows :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that for the purposes of calculating penalty under Section 271(1)(c), the provisions of Section 271(1)(c) as amended by the Finance Act, 1968, with effect from April 1, 1968, were not applicable and that the penalty has to be calculated according to the provisions of the Act which was applicable as per the provisions in force prior to April 1, 1968 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in reducing the amount of penalty imposed under Section 271(1)(c) from Rs. 18,000 to minimum imposable with reference to the tax sought to be evaded ?"

2. FOR the assessment year 1961-62, the assessee filed a return of his income before April 1, 1968. In due course, the assessment order was passed. It appears that there was a raid on the business premises of the assessee where some materials were discovered on the basis of which the ITO issued a notice under Section 148 requiring the assessee to file a return whi