JUDGMENT

Dwivedi, J. - This is a reference u/s 66(1) of the Indian Income Tax Act, 1922. The Income Tax Appellate Tribunal has referred for the court's opinion this question :

" Whether/on the facts and circumstances of the case, the Tribunal was right in holding that the penalty of Rs. 2 lacs levied on the assessee was not sustainable in law ? "

2. It seems to us that the question is not happily framed. We are reframing the question in this manner :

" Whether, on the facts and in the circumstances of the case, the Tribunal's opinion that the penalty of Rs. 2 lacs could not be levied on the assessee is erroneous in law ? "

3. We now proceed to deal with the question as reframed by us.

4. The assessee, Raja Mohammed Amir Ahmad Khan, was a Taluqdar. His estate was situated in the District of Sitapur. He was assessed to Income Tax for the assessment year 1942-43, the relevant year being the year ending on September 30, 1941. The assessee had income from property, dividends and other sources. The Income Tax Officer assessed him for the relevant year on an income of Rs. 1,00,662. The assessment order was made on June 29, 1943. Later on, the Income Tax Officer initiated proceedings u/s 34 of