Decided on February 18,1972



Sahyasaclii Mukherji, J. - (1.)This is an application by a dissolved partnership firm. At the relevant time the firm was registered under the Indian Partnership f Act as well as under the Income Tax Act. Assessment for the assessment years 1962 - 63 under the Income Tax Act 1961 was made on the said firm on 31st March, 1967. In the assessment order the Income Tax officer has recorded that the assessee was guilty of furnishing incorrect particulars and/or concealment of income, and in the premises the officer was satisfied prior to the completion of the assessment that the assessee was so guilty and proceeding for penalty should be taken. Accordingly, on 22nd March, 1967 the Income Tax officer, who in this case was the Income Tax officer "A" Ward, District 111(3), Calcutta, issued a notice to the assessee that whereas it appeared to him that the assessee had concealed the particulars of his income or deliberately furnished incorrect particulars of such income he was referring the penalty proceeding to the Inspecting Assistant Commissioner Range IV, Calcutta according to sub-section (2) of section 274 of the Income Tax Act, 1961. The assessee was further informed that further proceedings with regard to the levy of the penalty would take place before the said Inspecting Assistant Commissioner of Income Tax as provided under sub-section (2) of section 274 of the said Act. On the 29th July, 1967 there was an order of transfer passed by the Commissioner of Income Tax West Bengal - I under section 127 of the Income Tax Act 1961. It would be relevant to refer to the said order which is as follows "In exercise of the powers conferred by sub-section (1) of Sec. 127 of the Income-tax Act, 1961 (43 of 1961) and of all other powers enabling him in this behalf, the Commissioner of Income - tax, West Bengal - I, hereby transfers the cases, the particulars of which are mentioned in column 3 of the Schedule hereto annexed, from the Income-tax officer mentioned in Column 4 to the Income-tax Officer mentioned in Column 5 thereof. SCHEDULE. JUDGEMENT_35_LAWS(CAL)2_1972_1.html This order shall take effect from the 2nd Aug., 1967. JUDGEMENT_35_LAWS(CAL)2_1972_2.html
(2.)Item No. 1 referred to the said order related to the petitioner-firm. On the 21st Jan., 1969, the petitioner received a notice from the Inspecting Assistant Commissioner, Range V wherein it was stated that the Income Tax Officer 'C' Ward, Hundi Circle had referred under sub-section (2) of section 274 of the Income Tax Act, 1961 the penalty case of the petitioner under clause (c) of sub-section (1) of section 271 for the assessment year 1962-63. The assessee was required to appear before the said Inspecting Assistant Commissioner to show cause why penalty should not be imposed. In this application under Art. 226 of the Constitution the petitioner challenges the propriety and the validity of the penalty proceedings.
(3.)Various grounds have been raised in support of this petition. One of the points urged in support of this petition was that the Inspecting Assistant Commissioner had to be satisfied in course of the proceedings for assessment and as he was not so satisfied the penalty proceedings were invalid and irregular. In view of the judgment of the Special Bench of this Court in the Matter No. 137 of 1969 Mahabir Prasad Poddar Vs. The Income-Tax Officer, this contention of the assessee must be rejected. The assessee has also raised several points regarding the propriety of the penalty proceedings on the ground that the assessee was not guilty of any concealment of income or of furnishing incorrect particulars of income, f am of opinion that in this application the assessee is not entitled to agitate the said grounds as it would be open for the assessee to raise these contentions before the appropriate authorities. I need not,therefore, express any opinion on the merits of these contentions. It was also stated in the petition that the books of account and documents of the assessee had been all seized and in the absence of such books and documents it was not possible for the assessee to put up its defence but no contention in support of this ground was urged before me in this application. Therefore it is not necessary for me to decide this contention either.

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