JUDGMENT

Bharucha, J.-High Court answered in the negative and in favour of the Revenue the following questions :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact, in deleting the penalty levied under Section 271(1)(c) of the I.T. Act?

2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact, in holding that this is an agreed assessment on the basis of which penalty is not leviable?

3. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and facts, in holding that penalty cannot be levied as the assessing officer in the proposal under Section 271(1)(c) had not referred to Explanation (1B) to Section 271(1)(c) ?"

2. The assessee is in appeal by special leave.

3 . For the assessment year 1986-87 the assessee, which is a partnership firm, filed a return of income which stated that its total income was Rs. 6,76,890/-. The assessment was completed determining the total income of the assessee at Rs.7,90,170/-. This included a sum of Rs.93,000/- assessed as income from other sources.

4. The assessee purchased rice from s