- (1.)On an application made by the revenue under Section 256(2) of the Income-tax Act of 1961 (hereinafter referred to as " the Act"), this court directed the Income-tax Appellate Tribunal, Cuttack Bench, to state a case and refer the following question of law for its opinion and the Tribunal pursuant to the said direction has now stated the case and referred the said question :
" Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the assessee was not liable to be visited with penalty for having concealed the particulars of his income or furnished inaccurate particulars of such income in respect of :

(a) a sum of Rs. 14,050 representing income from house property;

(b) income from undisclosed sources of Rs. 51,000 said to be cash credit; and

(c) capital gains of Rs. 30,400 on the head of capital gains, and was, therefore, liable to penalty under Section 271(1)(c) of the Act ? "

(2.)The relevant assessment year is 1964-65 corresponding to the previous year ending on March 31, 1964. The Income-tax Officer included the following items as the assessee's income though the same had not been returned :
(3.)Penalty proceedings under Section 27I(1)(c) of the Act w.ere initiated and the Inspecting Assistant Commissioner, after hearing the assessee's expla nation, imposed a penalty of Rs. 60,000.