GANPAT RAI SANTU LAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference made by the Income-tax Appellate Tribunal, Patna Bench, under Section 256(1) of the I.T. Act, 1961 (hereinafter to be referred to as "the Act") and a statement of the case has been submitted to this court for its opinion on two questions which are as follows :

(2.) THE statement of the case, as originally submitted to this court, sets out the following facts :

(3.) THE Revenue, being aggrieved by the order of the AAC, appealed to the Tribunal and the assessee filed a cross-objection in that appeal. Both the matters were heard and decided together. THE Tribunal held that, viewing the orders of the ITO in their proper perspective, it was obvious that the order of the ITO to initiate penalty proceedings was contemporaneous and simultaneous with the assessment order itself. Relying upon a decision of the Madras High Court in the case of Artisan Press Ltd. v. Income-tax Appellate Tribunal [1958] 33 ITR 670, the Tribunal held that the penalty proceedings were properly commenced during the course of the main assessment proceedings and the departmental appeal was allowed. A copy of the Tribunal's order has been marked annex. "C" to the statement of the case. It is worthwhile to mention that in the Tribunal's appellate order an observation was made to the following effect :