- (1.) THE following question of law has been referred to us for our opinion at the instance of the revenue by the Income-tax Tribunal, Amritsar: "whether, on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the penalty of Rs. 90,600 imposed on the assessee under Section 271 (1) (a) of the Income-tax Act, 1961 ? "
(2.) THE brief facts giving rise to this reference are that the assessee-firm known as M/s. Mangat Ram Hazari Mal Kuthiala, Pathankot, carried on the business of exploitation of forests and sale of timber. It closed its accounts on the 30th June of each year. Its constitution was as follows: Name of the partner Share (i) Sh. Mangat Ram Kuthiala 9/16 (ii) Sh. Hazari Mal Kuthiala 7/16
(3.) ON 30th May, 1958, Shri Mangat Ram Kuthiala, passed away and so the firm was dissolved. By an agreement, dated 7th June, 1958, Shri Hazari Mal Kuthiala, in consideration of an agreed amount, transferred his rights and interest in the firm and the business was taken over by Shri Radhakishan and Shri Kewaal Kishan, sons of Shri Mangat Ram Kuthiala, with effect from 30th May, 1958. Shri Hazari Mal also died in September, 1960.;