Judgment :- Paripoornan, J. As directed by this court and at the instance of the Revenue the Income-tax appellate Tribunal (in short, the Tribunal) has referred the following two questions of law for the decision of this Court: 1. Was the appellate Tribunal justified in law in' interfering with the order passed by the appellate Assistant Commissioner dated 30-12-1983 for all or any of the reasons stated by it? 2. Was the order of remit passed by the appellate Assistant Commissioner in any way infirm or liable to be interfered with by the appellate Tribunal?" 2. The respondent is an assessee to income-tax. For the >ear 3 976-77 the Income-tax Officer, by order dated 18-3-1981 levied a penalty of Rs.39, 480/- on the respondent-assessee under S.271(1)(a) of the Income-tax Act. In' the appeal, the appellate Assistant Commissioner of Income-tax, by order dated 30-12-1983, set aside the order of penalty with, a direction to the Income-tax Officer to pass a fresh order, after giving an opportunity to the assessee of being heard. In second appeal, at the instance of the assessee, the Tribunal set aside the order of the appellate Assistant Commissioner and deleted the penalty levied by the Income Tar Officer. The appeal filed by the assessee was allowed by order dated 23-7-1986. It is thereafter, the Revenue moved the Tribunal to refer certain questions of law for the decision of this Court. It was declined. The Revenue moved this Court and this Court re-formulated or recast the questions as specified hereinabove and directed the Tribunal to refer the same to the court. 3. The order, levying the penalty under S.271(1)(a) was set aside by the appellate Assistant Commissioner with a direction to the Income tax to pass a fresh order after affording an opportunity to the assessee of being heard. This order was cancelled by the Tribunal. The Tribunal has given more reason than one. One of the reasons given by the Tribunal is that while exercising the powers under S.251(1)(b) of the Act the first appellate authority has no power to cancel the order appealed against and order a remit with directions. For the purpose of this case we are not embarking upon an adjudication as to whether, after the remit, if an order is passed, it will be within the time allowed by law. We need not adjudicate that larger question in this case. For the purpose of this case we are not embarking upon an adjudication as to whether, after the remit, if an order is passed, it will be within the time allowed by law. We need not adjudicate that larger question in this case. It will be sufficient if we advert to the jurisdiction of the appellate Assistant Commissioner exercising powers under S.251(1) (b) of the Act and examine whether in an appeal against an order imposing penalty he can set aside the order appealed against and order a remit with directions. 4. Section 251 of the Income-tax Act deals with the powers of the 1st appellate authority. It is as follows: "251. Powers of the Deputy Commissioner (Appeals) or, as the case may be the Commissioner (Appeals). (1) In disposing of an appeal, the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) shall have the following powers (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or-he may set aside the assessment and refer the case back to the Assistant Officer for making a fresh assessment in accordance with the directions given by the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) and after making such further enquiry as may be necessary, and the Assessing Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. (2) The Deputy Commissioner' (Appeals)*or, as the case may be the Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction." 5. Section 251(1)(a) deals with the power of the First appellate Authority in disposing of an appeal against an order of assessment. The appellate Authority may confirm, reduce, enhance or annul an assessment. He may also set aside the assessment and refer the case altogether to the assessing officer for making a fresh assessment and he can also issue directions in that behalf. The appellate Authority may confirm, reduce, enhance or annul an assessment. He may also set aside the assessment and refer the case altogether to the assessing officer for making a fresh assessment and he can also issue directions in that behalf. S.251(1)(b) deals with an appeal against an order-imposing penalty. Therein the only powers given to the appellate Authority are that he may either confirm the order or he may cancel such order or he may vary it either by enhancing the penalty or reducing it. Under section 251(1)(c), cases not governed by clauses (a) and (b) can be dealt with wherein the appellate Authority can pass such orders in the appeal as he thinks fit. Normally very wide discretion or jurisdiction is conferred on the 1st appellate authority under S.251(1)(c) incases not coming under S.251(1)(a)or(b). He may set aside the order appealed against and order a remit or make further directions or pass such other order which will meet the ends of justice. S.251 deals with the powers of the 1st appellate Authority in different situations. Whereas in cases coming under S.251 (1) (a) -- appeal against an order of assessment and cases other than appeals against assessment and penalty - the first appellate authority can pass any order as he thinks fit, in the appeals against orders imposing penalties, the power of the 1st appellate authority is circumscribed or confined within limits. He can only confirm or cancel such order or vary it either enhancing it or reducing it. It is not open to the 1st appellate authority to set aside the order of the income-tax officer and order a remit or to give 'any direction as done in the instant case. This section is similar to S.31(3)(f) of the Income-tax Act, 1922. Construing S.31(3)(f) of the Income-tax Act, 1922, a Bench of the Allahabad High Court in Commissioner of Income-tax v. Rameshwardas Ram Narain (107ITR 710) held that there is no power in the first appellate authority to give a direction to take fresh action in accordance with law. In other words the 1st appellate authority in the cases governed by S.31(3)(f) of the Income-tax Act 1922 corresponding to S.251(1)(b) of the Income-tax Act, 1961 cannot set aside the order appealed against and order a remit or give further directions in that behalf. In other words the 1st appellate authority in the cases governed by S.31(3)(f) of the Income-tax Act 1922 corresponding to S.251(1)(b) of the Income-tax Act, 1961 cannot set aside the order appealed against and order a remit or give further directions in that behalf. In this perspective the Tribunal was justified in cancelling the order passed by the appellate Assistant Commissioner and in the result cancelling the penalty levied. The decision of the Tribunal is not open to objection. We therefore hold that the order of the Tribunal does not suffer from any error of law. We answer question No.l in the affirmative to the extent we hold that on the language of S.251(1)(b) of the Income-tax Act, 1961, the. 1st appellate authority has no power to set aside the order appealed against and order a remit with directions. The order passed by the Tribunal interfering with the order passed by the appellate Assistant Commissioner dated 30-12-1983 is valid and justified. We answer question No.2 in the affirmative, against the Revenue and in favour of the assessee and hold that the order of the appellate Assistant Commissioner was infirm, and that he has no power to set aside an order levying penalty with a direction to pass fresh orders. Both the questions are answered against the Revenue and in favour of the assessee. The Income Tax Reference is disposed of as above. A copy of this judgment under the seal of this Court and the signature of the Registrar will be forwarded to the Income-tax Tribunal, Cochin Bench.