LAKSHMANAN, J. - (1.)THIS reference application has been filed against the order dated 24.3.1999 passed by the Income Tax Appellate Tribunal, Jaipur in R.A. No.2/JP/1999 arising out of I.T.A. No. 1647/JP/92 for the assessment year 1986 -87.
(2.)THE brief facts giving rise to this reference application are: that the assessee had furnished statement of advance of tax on 9.9.1995 showing advance tax payable at Rs. 15,167/ - on the income of Rs. 1,21,530/ -. However, assessment was completed on the income of Rs. 14,64,730/ - on which the assessed tax came to Rs. 3,37,535/ -. In view of these facts, the Assessing Officer imposed penalty under s. 273(2)(a) of the Income Tax Act, 1961 (for short 'the Act') at Rs. 20,000/ -.
Being aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who upheld the orderof the Assessing Officer vide his order (Annexure/2) dated 2.6.1992. Thereafter, the assessee preferred a second appeal before the Income Tax Appellate Tribunal, and the Income Tax Appellate Tribunal vide its order (Annex. 3) dated 29.9.1998 allowed the appeal filed by the assessee and opined that having accepted the reasonableness of the cause by which the assessee was prevented to the the return of income in time, it was not proper in not accepting the same circumstances, so far as penalty proceedings under Sec. 273 of the Act are concerned. Accordingly, the penalty order passed by the Assessing Officer was set aside.

(3.)AGGRIEVED with the order (Annex.3) dated 29.9.1998 passed by the learned Income Tax Appellate Tribunal, the Department preferred a reference application under Sec. 256(1) of the Act for a direction to the Income Tax Appellate Tribunal, Jaipur to refer the following question of law for the opinion of this Court; 'Whether on the facts and in the circumstances of the case, the ITAT was justified in cancelling the order passed by the Assessing Officer imposing penalty under Sec. 273 of the Income Tax Act, 1961 ?