Dashrath Prasad Dubey vs Commissioner of Income Tax

G.G. Sohani, J.—By this reference u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as " the Act "), the Income Tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :

" Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the order of the Inspecting Assistant Commissioner of Income Tax imposing a penalty u/s 271(1)(c) of the Income Tax Act, 1961, was not bad in law for want of jurisdiction ? "

The material facts giving rise to this reference briefly are as follows:

While framing the assessment for the assessment years 1973-74, the Income Tax Officer made certain additions to the total income disclosed by the assessee holding that the assessee had received income from three sources which were not disclosed by him in the return. For concealment of income from the said sources, the Income Tax Officer initiated penalty proceedings u/s 271(1)(c) of the Act and referred the case to the Inspecting Assistant Commissioner u/s 274(2) of the Act. The Inspecting Assistant Commissioner overruled the contentions raised on behalf of the assessee and by his order dated March 20, 1978, imposed a penalty of Rs. 30,000 u/s 271(1)(c) of the Act. Aggrieved by that order, the assessee preferred an appeal before the Tribunal. It was urged by the assessee before the Tribunal that on March 20, 1978, when the Inspecting Assistant Commissioner passed the order imposing penalty, the Inspecting Assistant Commissioner had no jurisdiction to impose penalty u/s 271(1)(c) of the Act in view of the fact that Sub-section (2) of Section 274 of the Act, iu pursuance of which the Income Tax Officer was required to refer the matter for imposition of penalty to the Inspecting Assistant Commissioner, had been deleted by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976. This contention raised on behalf of the assessee was rejected by the Tribunal and on merits the Tribunal upheld the levy of penalty of Rs. 6,000. Aggrieved by the order of the Tribunal, the assessee sought a reference and it is at the instance of the assessee that the aforesaid question of law has been referred to this court for its opinion.

The learned counsel for the parties submitted that to answer the question referred to this court, the Tribunal be directed to send a supplementary statement of the case stating the date on which the matter regarding imposition of penalty was referred to the Inspecting Assistant Commissioner, as that date would be material for the purpose of answering the question referred to this court. In our opinion, this submission is well founded in view of a decision of this court in Commissioner of Income Tax Vs. A.N. Tiwari, , where it has been held that what was important to see was whether the reference was validly made to the Inspecting Assistant Commissioner.

We, therefore, direct the Tribunal to send a supplementary statement of the case stating therein the date on which the matter regarding imposition of penalty was referred by the Income Tax Officer to the Inspecting Assistant Commissioner in the instant case. After receipt of such statement, the reference shall be fixed for further hearing.