T.K.Basu, J. - (1.) In this application under Article 226 of the Constitution of India the petitioner, Stadmed (P.) Ltd., challenges a notice dated the 27th March, 1967, issued by the Income-tax Officer, "H' Ward, Companies Dist. V, Calcutta, under Section 274 read with Section 271 of the Income-tax Act, 1961, hereinafter referred to as "the Act".
(2.) The facts of this case lie within a very short compass and are not disputed. The assessment year with which we are concerned is 1962-63. The impugned notice was issued on the 27th March, 1967, whereas the order of assessment for that year was made on the 29th March, 1967, that is, two days subsequent to the date of the issue of the notice of penalty. Mr. S. Bhattacharjee, learned counsel appearing on behalf of the assessee, draws my attention to Section 274(2) of the Act, which is in the following terms :. "274. (2) Notwithstanding anything contained in Clause (iii) of Sub-section (1) of Section 271, if in a case falling under Clause (c) of that Sub-section, the minimum penalty imposable exceeds a sum of Rs. 1,000, the Income-tax Officer shall refer the case to the Inspecting Assistant Commissioner who shall, for the purpose, have all the powers conferred under this Chapter for the imposition of penalty."
(3.) My attention was next drawn to a Division Bench judgment of this court in the case of Commissioner of Income-tax v. A.K. Das. In that decision, after stating the relevant statutory provisions, P. B. Mukharji J. (as he then was), observed at page 47 of the report as follows: "Certain results follow from a provision of this nature. The first is that the authority, prima facie, belongs to the Income-tax Officer. It is before him that the first foundations of penalty are laid. That foundation is his 'satisfaction' in the course of ssessment proceedings that there has been concealment. He is, therefore, the fons et origo of this penalty proceeding. Unless he initiates or the Appellate Assistant Commissioner initiates, the Inspecting Assistant Commissioner cannot initiate. In the natural context that is what should be when one remembers that after all the assessment proceedings are being held by the Income-tax Officer or the Appellate Assistant Commissioner who are the persons likely at all to knew whether there has been a concealment and not the Inspecting Assistant Commissioner who not dealing with the regular assessment proceedings, would have little or no knowledge of concealment. It is significant to emphasize also that Section 271 of the Income-tax Act does not breathe a word about Inspecting Assistant Commissioner.";