- (1.) This is a reference at the instance of the Revenue and the following two questions have been referred by the Tribunal for the opinion of this court arising out of the order of the Tribunal in I. T.A. No. 581 (Cal) of 1992 : "1. On the facts and in the circumstances of the case, whether the learned Tribunal was justified in law in setting aside the penalty order dated April 17, 1989, for an amount of Rs. 1 lakh imposed under Section 271B, on the ground that the show cause notice served on the assessee was invalid ?
(2.) Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in law in holding the view that the deficiencies in the show cause notice are not curable by the provisions of Section 292B of the Income-tax Act, 1961, and thereby holding the order of penalty invalid ?" 2. The facts giving rise to the aforesaid two questions are that for the assessment year 1985-86, the Assessing Officer formed his opinion which is reflected in his order of assessment that tax audit report under the provisions of Section 44AB have not been filed within the prescribed time and directed that penalty proceedings under Section 271B of the Income-tax Act, 1961, be initiated. The Assessing Officer after affording the petitioner an opportunity of hearing passed an order imposing penalty of Rs. 1 lakh under Section 271B. The asses-see preferred an appeal before the Commissioner of Income-tax (Appeals) which was dismissed. Thereupon an appeal was filed by the assessee before the Tribunal which vide its order dated April 24, 1996, allowed the appeal and cancelled the penalty on the ground that the penalty notice issued to the assessee was not signed by the Assessing Officer and so being invalid the same invalidated the imposition of penalty as well. In coming to the aforesaid conclusion reliance was placed by the Tribunal upon a Division Bench judgment in Umashankar Mishra v. CIT. It has been noticed in the order of the Tribunal that the said ground pertaining to the show cause notice being not valid was ground No. 1 of appeal before the learned Commissioner of Income-tax (Appeals) and the same had been incorporated as ground No. 2 before the Tribunal with the allegation that the same has not been considered by the learned Commissioner of Income-tax (Appeals). The Tribunal thereupon considered the said ground and after finding that the show cause notice dated March 7, 1988, issued to the assessee does not bear the signature of the Assessing Officer and the space meant for his signature was left blank, though office copy of the notice placed in the file bears the signature of the Assessing Officer allowed the assessee's appeal and set aside the order of penalty.
(3.) Mr. Prabir Bhowmick, learned counsel for the Revenue, contended that there is an admitted default on the part of the assessee in complying with the requirements mentioned under Section 44AB and, therefore, Section 271B is clearly attracted. The procedure for imposing penalty is prescribed under Section 274 whereby hearing has to be afforded to the petitioner and the same has been complied with. Defect in the show cause notice as alleged by the assessee being a mere irregularity, the same is curable under Section 292B and, therefore, the show cause notice could not have been invalidated. No such objection has been raised before the Assessing Officer nor was the same pleaded before the Commissioner of Income-tax (Appeals). The Tribunal erred in setting aside the penalty proceedings on that ground. It was further contended as held in CIT v. Anand and Co. that reply was filed by the assessee pursuant to the show cause notice and there being no apprehension in the assessee's mind as to the nature of the notice or dubiousness of the identity of the officer issuing the same, the notice could not be invalidated by the Tribunal in view of the provisions contained in Section 292B. It was further contended that instead of dealing with the substance of the matter, the Tribunal has been unduly influenced by procedural technicalities.;