- (1.) The Income-tax Appellate Tribunal, Allahabad, has referred the following questions of law under Section 256(1) of the Income-tax Act, 1961, (hereinafter referred to as "the Act"), for the opinion to this court. "Whether the Tribunal was right in holding that under the facts and circumstances of the case the Commissioner of Income-tax cannot revise under Section 263 the order under Section 271(1)(c) passed by the Income-tax Officer because he had dropped the penalty proceedings? Whether the Income-tax Appellate Tribunal was justified in holding that penalty under Section 271(1)(c) to be passed as a result of the impugned order under Section 263 will be barred by time ?"
(2.) The reference relates to the assessment year 1977-78 relating to the penalty proceeding under Section 271(1)(c) of the Act.
(3.) Briefly stated the facts giving rise to the present reference are as under :;