- (1.) THERE are two appeals before us. In Civil Appeal No. 911 of 1977, two questions were referred under S.256(1) of the Income tax Act, 1961, for the opinion of the High Court. The two questions are : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that inasmuch as the assessee did not appear before the original Income tax Officer in response to the notice asking it to show cause why penalty should not be imposed, and had made no oral submissions but had only made a reply in writing it was in order for the successor Income tax Officer to have imposed the penalty without giving a fresh notice to the assessee or hearing the assessee ?
(2.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in holding that notwithstanding that the return of Income had been filed on February 6, 1961, i.e., within the period permissible under S.139(4) of the Income tax Act, 1961, the imposition of a penalty was justified as there was a delay for the purpose of S.271(1)(a) of the Income tax Act, 1961 ?" Both the questions were answered by the High Court against the assessee and in favour of the Revenue. We see no error in the order of the High Court. 2. So far as the first question is concerned, the only contention of the assessee was that before a penalty order was passed by the successor Income tax Officer, no personal hearing was given to him. The Act does not make it obligatory upon the successor-Income tax Officer to give a personal hearing. In this case, the show-cause notice was issued on November 17, 1966. Even though a period of two years elapsed, no explanation or representation was made by the assessee, whereupon the order of penalty was passed on December 23, 1968. S.129 makes it clear that a successor Income tax Officer has jurisdiction to continue the proceedings from the stage at which the proceeding was left by his predecessor. The proviso, no doubt empowers the assessee to demand that before the proceeding is so continued, the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, be reheard. But, in this case, it is not suggested that any such demand was made by the assessee. In such circumstances, the High Court was right in answering the question against the assessee. So far as the second question is concerned, the only submission is that since the assessee was entitled to and did file his return before making the assessment, no penalty should be levied under S.271(1)(a), even though the return was filed beyond the prescribed date. We do not think that this contention is sustainable in law. Merely because, Sub-section (4) of S.139 enables the assessee to file his return at any time before the assessment is made, it does not mean that his liability to pay penalty under S.271(1)(a) is erased. We affirm the opinion of the High Court on this question as well.
(3.) NOW , coming to Civil Appeal No. 913 of 1977, the only question referred under S.256(2) is the following : "Whether, on the facts and in the circumstances of the case, for the purpose of calculating the tax with reference to which the penalty was leviable in the case of a registered firm under S.271(1)(a) read with S.271(2) the tax payable by such firm should be determined after the tax paid by partners in respect of their share of profit from the firm from the gross tax payable by the firm, on the basis that it was unregistered firm ?" ;