9911796707
|
Home
Issues Involved:
1. Sustenance of penalty levied under section 273. 2. Validity of the show-cause notice issued under section 273. 3. Applicability of section 292B to cure procedural irregularities. 4. Whether the penalty on the firm precludes penalty on the partner. 5. Compliance with principles of natural justice. Issue-wise Detailed Analysis: 1. Sustenance of Penalty Levied Under Section 273: The appeal was against the sustenance of a penalty of Rs. 90,877 under section 273 for the assessment year 1982-83. The assessee filed a return declaring an income of Rs. 7,750, but the income was assessed at Rs. 19,12,061, later reduced to Rs. 18,70,561. The Assessing Officer (AO) found that the assessee failed to file a statement of advance tax payable, initiating penalty proceedings under section 273. The Commissioner of Income-tax (Appeals) confirmed the penalty, stating that the appellant had been previously assessed and was required to file a statement of advance tax as per section 209A(1)(a). The appellant's failure to furnish the statement was found to be without reasonable cause. The contention that no penalty could be levied on the assessee being a partner in a firm already penalized was rejected as the additions were not related to the share income from the firm. 2. Validity of the Show-Cause Notice Issued Under Section 273: The assessee argued that the show-cause notice under section 273 did not specify the particular default committed, denying the assessee the opportunity to provide a proper reply. The AO mentioned that the assessee failed to file a statement of advance tax but levied the penalty under section 273(2)(b) for not filing an estimate of advance tax, which was contradictory. The show-cause notice did not clearly specify the charge, violating principles of natural justice and section 273B. The learned Departmental Representative contended that the penalty was justified as the assessee failed to file a statement of advance tax, and the procedural irregularity was curable under section 292B. 3. Applicability of Section 292B to Cure Procedural Irregularities: The learned Departmental Representative argued that the mention of section 273(2)(b) instead of section 273(1)(b) was a procedural irregularity curable under section 292B. The learned Accountant Member held that non-issue of a proper show-cause notice vitiated the proceedings, making the penalty invalid. The learned Judicial Member disagreed, stating that the assessee failed to file a statement of advance tax, justifying the penalty. The Third Member supported the learned Accountant Member's view, emphasizing that the specific charge was not communicated to the assessee, denying a proper opportunity to be heard. 4. Whether the Penalty on the Firm Precludes Penalty on the Partner: The assessee contended that since the firm in which he was a partner was already penalized under section 273, no penalty could be levied on him for the same default. The Commissioner of Income-tax (Appeals) and the learned Judicial Member rejected this argument, stating that the additions made were not related to the share income from the firm. The learned Accountant Member did not specifically address this issue, focusing on the procedural aspects of the penalty proceedings. 5. Compliance with Principles of Natural Justice: The learned Accountant Member emphasized that the show-cause notice did not specify the charge, denying the assessee an opportunity to be heard, which violated principles of natural justice. The learned Judicial Member did not address this aspect, focusing on the facts of non-compliance with section 209A(1)(a). The Third Member supported the learned Accountant Member's view, highlighting the importance of informing the assessee of the specific charge to provide a proper opportunity to explain. Conclusion: The penalty levied was held invalid due to non-compliance with procedural requirements and principles of natural justice. The show-cause notice did not specify the charge, denying the assessee an opportunity to be heard. The procedural irregularity was not curable under section 292B. The penalty on the firm did not preclude penalty on the partner, but the specific charge must be communicated to the assessee. The appeal was allowed, and the penalty was cancelled.
|
