COMMISSIONER OF INCOME-TAX VS JAGANNATH PD. NANKOO PD
1998 P T D 2380
[222 I T R 58]
[Allahabad High Court (India)]
Before M. Katju and Dr. B.S. Chauhan, JJ
COMMISSIONER OF INCOME-TAX
versus
JAGANNATH PD. NANKOO PD
Income-tax Reference No.231 of 1980, decided on 03/04/1996.
Income-tax---
----Assessment---Tribunal allowing petition of assessee under S.146 filed before I.T.O.---Justified---Reassessment---Tribunal holding notice under S.148 not valid--- Justified--- Tribunal cancelling imposition of penalty under S.271(1)(a)--- Justified--- Indian Income Tax Act, 1961 Ss. 146, 148 & 271(1)(a).
For the assessment year 1962-63 proceedings under section 148 of the Income Tax Act, 1961, were initiated and reassessment order was passed and penalty imposed. The Tribunal held that there was no valid notice under section 148 served on the assessee and the condition precedent for issuing notice under section 142(1) of the Act was lacking. On a reference:
Held, that the Tribunal was justified in law in allowing the application of the assessee filed before the Income-tax Officer under section 146 and in holding that the assessee was prevented by sufficient cause from complying with the terms of notice under section 148 and the notice under section 148 of the Act was not valid. The cancellation of penalty under section 271(1)(a) was justified.
CIT (Addl.) v. Prem Kumar Rastogi (1980)124 ITR 381 (All.) ref.
Shekhar Srivastava for the Commissioner.
Vikram Gulati for the Assessee.
JUDGMENT
This is an income-tax reference under section 256 of the Income Tax Act, 1961, in which the following three questions have been referred for our opinion:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing the applications of the assessee filed by it before the Income-tax Officer under section 146 of the Income Tax Act, 1961?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee was prevented by sufficient cause in not complying with the terms of notice under section 148 of the Income Tax Act, 1961?
(3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the penalty imposed by the Income-tax Officer on the assessee under section 271(1.)(a) of the Income Tax Act, 1961?"
We have heard Sri Shekhar Srivastava, for the Department, and Sri Vikram Gulati, for the assessee. The relevant assessment year is 1962-63 in which the income assessed by the Income-tax Officer was Rs.83,700, but it was ultimately reduced to Rs.54,111 by the Tribunal. Proceedings under section 148 were initiated and a reassessment order was passed and penalty imposed. The appeal of the assessee before the Appellate Assistant Commissioner failed, but in further appeal the Tribunal held that there was no valid notice under section 148 served on the assessee and the condition precedent for issuing notice under section 142(1) was lacking. These are findings of fact and hence we cannot in advisory jurisdiction (sic). We may also refer to a decision of this Court in the case of Addl. CIT v. Prem Kumar Rastogi (1980) 124 ITR 381, where it has been held that notice on an unauthorised person is not valid.
As regards the first question, it has also to be decided in favour of the assessee in view of the findings of the Tribunal. Thus all the three questions are answered in the affirmative, i.e., in favour of the assessee-and against the Department.
M.B.A./1513/FC???????????????????????????????????????????????????????????????????????????????? Order accordingly.