R. L. Gulati, J. - (1.) THIS is a petition under Article 226 of the Constitution and the facts giving rise to it are briefly these.
(2.) THE petitioner is a partnership firm which runs a flour, oil and rice mill at Bareilly, in the name and style of M/s. Raghunandan Prasad Mohan Lal. On Decem ber, 29, 1959, it filed its return for the assess ment year 1959-60 showing a net profit of Rs. 22, 674. Later, a revised return was filed by it on February 1, 1962, showing a loss of Rs. 3, 940, on the ground that in the ear- lier return the liability for sales tax had not been deducted. The Income-tax Officer did not accept the petitioner's return and by his order dated March 30, 1964 assessed it at a net income of Rs. 82, 662. The petitioner appealed. At the time of the hearing of the appeal the Appellate Assistant Commissioner of Income-tax found that there were certain deposits in the petitioner's bank account which had not been properly explained and the partners had not withdrawn any amount from the partnership accounts for their per sonal expenses. The Appellate Assistant Commissioner of Income-tax after calling for a remand report from the Income-tax Officer came to the conclusion that the petitioner had earned an income of Rs. 1, 03, 500 from undisclosed sources and finally computed the petitioner's total income at Rs. 1, 69, 350 by his order dated April 5, 1965. On the same day he issued a notice under Section 274 of the Income-tax Act, 1961, calling upon the petitioner to show cause why penalty under Section 271 (c) should not be imposed upon it for having concealed its income or having furnished inaccurate particulars thereof. By his order dated December 31, 1966 the Ap pellate Assistant Commissioner of Income-tax imposed a penalty of Rs. 52, 500 which was reduced on appeal to Rs. 10, 000 by the In come Tax Appellate Tribunal by its order dated December 17, 1967. One of the con tentions raised by the petitioner before the Income Tax Appellate Tribunal was that Section 297 (2) (g) of the Act was ultra vires. The Income-tax Appellate Tribunal rely ing upon the decision of the Supreme Court in K. S. Venkataraman and Co (P) Ltd. v. State of Madras, (1966) 60 ITR 112 = (AIR 1966 SC 1089) declined to adjudicate upon that contention of the petitioner, because the Supreme Court in that case had held that an Authority constituted under a Statute was not competent to pronounce upon the vali dity of a provision of that Statute. The peti tioner then filed the present writ petition and amongst others, raised a ground about the constitutional validity of Section 297 (2) (g) of the Act. This petition came up for hearing be fore a Division Bench of this Court of which one of us was a Member. In support of his contention that Section 297 (2) (g) was ultra vires, the learned counsel for the petitioner relied upon a decision of the Bombay Fish Court in Shakti Offset Works v. Inspecting Asst. Commr of Income Tax, (1967) 64 TTR 637 (Bom) and also on certain observations of the Supreme Court in Jalan Trading Co. v. Mill Mazdoor Sabha, AIR 1967 SC 691 and contended that an earlier decision of this Court in Income-tax Officer v. Firm Madan Mohan Damma Mai, (1968) 70 ITR 293 (All) required reconsideration. As the Bench con sidered the question to be of considerable importance and not free from difficulty, it referred this petition to a larger Bench and that is how it has now come up before the Full Bench.
(3.) IN this petition the petitioner has not only challenged the penalty proceedings, but has also challenged the orders of the Appel late Assistant Commissioner and the Income-tax Appellate Tribunal passed in appeal against the assessment order. We cannot allow the petitioner to agitate any question relating to the assessment, because the peti tioner has already availed of the statutory remedies and at its instance a reference under Section 66 (1) of the Income-tax Act, 1922 is pending in this Court. Any question ari sing out of the order of the Income-tax Ap pellate Tribunal can be decided in that reference and cannot be entertained by this Court under Article 226 of the Constitution. We shall, therefore, confine ourselves to the grounds relating to the imposition of penalty.;