- (1.) THE two questions of law referred for the opinion of this court read as under : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in affirming the order of the Appellate Assistant Commissioner of Income-tax cancelling the penalty of Rs. 8,176 levied by the Income-tax Officer under Section 271 (l) (a) ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that penalty under Section 271 (1) (a) was leviable only if the assessee-firm had not discharged its tax liability as a registered firm ?"
(2.) THE return of income which should have been filed on or before July 31, 1976, was not filed by the assessee, a registered firm till December 7, 1977. It was, however, found that the tax deducted at source was in excess of the amount due from the assessee. The assessee was, therefore, entitled to refund of tax.
(3.) THE Income-tax Officer, however, imposed a penalty of Rs. 3,179 which was later set aside by the Appellate Assistant Commissioner on appeal. The Tribunal too decided in favour of the assessee. This is the factual background leading to this matter being referred to this court,;