COMMISSIONER OF INCOME TAX Vs. C K NAHA AND BROS
HIGH COURT OF CALCUTTA
COMMISSIONER OF INCOME-TAX
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Deb, J. -
(1.)The following question is involved in this reference under Section 256(1) of the I.T. Act, 1961 :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the IAC travelled beyond his jurisdiction, and accordingly, the penalty order passed by him was null and void ?"
(2.)The penalty proceedings arose out of the assessment year 1963-64. The assessee is a firm. The facts stated by the Tribunal may be briefly stated as follows : The ITO brought Rs. 10,263 to tax as the assessee's income from undisclosed sources and issued a notice under Section 274 read with Section 271(1)(c) of the Act to the assessee for concealment of Rs. 10,263 as its income. As the minimum penalty imposable on Rs. 10,263 exceeded Rs. 1,000, the ITO referred the penalty proceeding to the IAC before whom it was admitted by the assessee's representative that this amount was wrongly shown by the assessee's accountant in the balance-sheet without verifying the correct facts. The assessee's explanation was that this amount was shown by mistake in the balance-sheet as a partner of the assessee-firm who was looking after the accounts died suddenly and the clerk who was entrusted with the maintenance of account books was not conversant with the accounts. The assessee's representative also filed a revised balance-sheet before the IAC who, on the basis of the said revised balance-sheet and on the materials placed by the assessee before him, recomputed the income and held that the assessee had understated Rs. 19,647 as its income and accordingly he imposed penalty of Rs. 16,300 on the assessee. The assessee appealed and it was found by the Tribunal that the charge of concealment of income of Rs. 10,263 made against the assessee by the ITO was washed away by the findings of the IAC who had made out a new case of concealment of a different sum of Rs. 19,647 against the assessee and had imposed penalty on it. Accordingly, the Tribunal set aside the penalty by holding that the IAC had no jurisdiction to impose penalty in respect of concealment of Rs. 19,677.
(3.)There is no decision of this court on the question involved in this reference in which no one has appeared for the assessee. In view of the contentions made on the 9th August, 1976, by Mr. Ajit Sengupta, the learned counsel for the revenue, we adjourned this matter and requested the learned counsel, Dr. Debi Pal, and his junior, Mr. Murarka, to assist us. They have done so and we record our appreciation to them.
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