1995 (8) TMI 59 - HC - Income Tax

Summary

Issues:
1. Jurisdiction of the court to quash penalty notice under section 271(1)(c) of the Income-tax Act, 1961.
2. Legality of issuing multiple penalty notices for the same assessment year.
3. Refusal to stay penalty proceedings by the Tribunal.

Detailed Analysis:
1. The petitioner sought to quash a penalty notice dated November 12, 1992, under section 271(1)(c) of the Income-tax Act, 1961, and an order dated April 15, 1993, by the Tribunal refusing to stay proceedings. The petitioner contended that the notice was illegal and without jurisdiction as no assessment proceedings were pending before the issuing authority. The court highlighted that the jurisdiction under article 226 of the Constitution is discretionary and extraordinary, emphasizing the importance of exhausting statutory remedies before seeking prerogative writs. However, it was noted that the issuing authority did have the power to issue notices under section 271 but questioned the justification for issuing a notice when proceedings were already initiated by another authority for the same assessment year.

2. The petitioner argued that issuing two parallel notices for the same assessment year amounted to double jeopardy. The court acknowledged the discretionary power of the Tribunal to stay proceedings and emphasized that the exercise of such power is discretionary and must consider settled norms. It was clarified that the refusal to stay proceedings, if based on established norms, does not indicate a legal infirmity or jurisdictional error. The court opined that the impugned order refusing to stay proceedings could not be considered without jurisdiction warranting interference in the discretionary writ jurisdiction.

3. The court directed that if the appeal pending before the Tribunal was not decided on the merits, it should be expedited and preferably resolved within two months from the date of the court's order. The petition was ultimately disposed of, and any existing stay order was vacated. The court ordered the issuance of a copy of the judgment to the respective counsels upon payment of charges within two days.