Income-tax Reference Nos. 43 to 46 of 1988. Case: Commissioner of Income Tax Vs M. Sreedharan. High Court of Kerala (India)
| Case Number | Income-tax Reference Nos. 43 to 46 of 1988 |
| Counsel | For Appellant: P.K. Ravindranatha Menon, Sr. Adv. and N.R.K. Nair, Adv.and For Respondents: N. Sukumaran and S. Ananthasubramonyan, Advs. |
| Judges | K.S. Paripoornan and K.P. Balanarayana Marar, JJ. |
| Issue | Income Tax Act, 1961 - Sections 129, 271(1), 274 |
| Citation | ILR1991(2) Kerala 864, 1991 (190) ITR 604 (Ker), 1992 (62) TAXMAN 344 (Ker) |
| Judgement Date | March 05, 1991 |
| Court | High Court of Kerala (India) |
Judgment:
K.S. Paripoornan, J.
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These are connected cases. 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 in the above cases:
1. Whether, on the facts and in the circumstances of the case and on an interpretation of Section 129 of the Income Tax Act, the Tribunal is right in interfering with the penalty order by confirming the order of the Appellate Assistant Commissioner?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee cannot be deemed to have declined to avail of the opportunity by demanding to have a rehearing or reopening of the case, nor could he be deemed to have waived it?
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The same assessee is the respondent in all the four referred cases. Common questions arise for consideration in the connected cases. They relate to the assessment years 1973-74, 1974-75 and 1975-76. The respondent is an assessee to Income Tax. For the assessment years 1973-74 and 1974-75, the Income Tax Officer initiated proceedings under Section 271(1)(c) of the Income Tax Act, 1961, for alleged concealment of the particulars of income. For the assessment year 1975-76, the Income Tax Officer initiated proceedings under Section 271(1)(c) of the Act for late filing of the return and under Section 271(1)(c) of the Act for concealment of the particulars of income. That is why for the three assessment years, there were four proceedings and four appeals. Two appeals relate to the assessment year 1975-76. For all the years, penalties were levied by the Income Tax Officer under Section 271(1)(c) of the Act and for the year 1975-76, penalty under Section 271(1)(c) of the Act was also levied. In the appeals filed by the assessee, the Appellate Assistant Commissioner held that the Income Tax Officer, who levied the penalty in all the four cases, is different from the Income Tax Officer who had completed the assessments and initiated the penalty proceedings and the officer who levied the penalty did so without giving an opportunity to the assessee of being heard or even without issuing a notice to the assessee. The Appellate Assistant Commissioner held that when a successor-officer takes up the penalty proceedings for disposal, it is only fair and proper that he gives an opportunity to the assessee of being heard and if he fails to do so and levies the penalties without giving an opportunity to the assessee, the penalty orders will be bad in law. He relied on the decision of the Calcutta High Court in CIT v. Smt. Chitra Mukherjee [1981]127ITR252(Cal). All the four appeals filed by the assessee were allowed and the penalties levied were cancelled. The Revenue carried the matter by way of appeals before the Tribunal. All the four appeals were considered together and a common order was passed by the Tribunal, dated July 7, 1983, After adverting to the rival pleas put forward before it and after adverting to Section 129 and Sections 271(1)(a), 271(1)(c) and 274(1) of the Income Tax Act and the decisions of the Andhra Pradesh High Court in Anantha Naganna Chetty v. CIT M [1970]78ITR743(AP) and of the Calcutta High Court in Smt. Chitra Mukherjee's case [1981]127ITR252(Cal), the Tribunal held that, whenever any Income Tax authority is succeeded by another, the successor may continue the proceedings from the stage at which the proceeding was left by his predecessor and, in such a case, the assessee has a right to demand that, before the proceeding is so continued, the previous proceedings or any part thereof should be reopened. The Tribunal further held that it is implicit in the Section that the succeeding authority should intimate to the assessee his intention to continue the proceeding from the stage at which it was left by his predecessor. In the absence of any opportunity provided for the exercise of his right or without the knowledge That such opportunity exists, the assessee cannot be deemed to have...
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