Judgment:
1. On an application under Section 256, the Tribunal was directed to refer the following question for the opinion of this court :--
'Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in cancelling the penalty imposed under Section 273(2)(a) of Rs. 46,416 notwithstanding the fact that R. A. under Section 256(2) of the Income-tax Act, 1961, before the hon'ble High Court on the quantum issue has been filed and the decision of which is pending ?'
2. In pursuance of the direction, the Tribunal has referred the aforesaid question for the opinion of this court. At the outset, learned counsel for the assessee submits that in the quantum of appeal, the entire addition has been deleted, therefore, no base remains for sustaining the penalty.
3. Learned counsel for the Department prays for time to verify this fact. Five to six opportunities were given and the reference was adjourned, but he has failed to controvert the facts submitted by learned counsel for the assessee.
4. Considering his submissions, when the entire addition has been deleted in the quantum appeal, no reason survives for sustaining the penalty or interfering in the order of the Tribunal.
5. In the result, we answer the question in the affirmative, i.e., in favour of the assessee and against the Department.
6. The reference so made, stands disposed of accordingly.