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Issues:
Jurisdiction of notice issued by Assistant Commissioner of Income-tax, Cross-examination opportunity denial, Power of Commissioner (Appeals) to direct further inquiry in appeal against penalty order. Analysis: The petitioner, an assessee under the Income-tax Act, challenged a notice issued by the Assistant Commissioner of Income-tax, Central Circle-II, regarding penalty proceedings. The petitioner sought an opportunity to cross-examine Shri K. K. Dugar but was denied. A penalty was imposed, leading to an appeal before the Commissioner of Income-tax (Appeals). The Commissioner directed the assessing authority to record Shri Dugar's statement and allow cross-examination, prompting the petitioner to challenge the notice. The crux of the issue revolved around the power of the Commissioner (Appeals) to direct further inquiry in an appeal against a penalty order. The petitioner contended that the Commissioner (Appeals) lacked the authority to order an inquiry under section 251(1)(b) of the Income-tax Act. However, the court highlighted section 250(4), which empowers the Commissioner (Appeals) to conduct further inquiries before disposing of an appeal or direct the assessing authority to do so. The court emphasized that this provision allows for inquiries to be made before the appeal is finalized, even in penalty cases. The court dismissed the writ petition, upholding the Commissioner (Appeals)'s authority to order an inquiry in the present case. The judgment emphasized that while the Commissioner's power under section 251(1)(b) is limited to confirming, canceling, or varying a penalty order, section 250(4) grants the authority to conduct further inquiries before the appeal's final disposal. The petitioner was ordered to pay costs to the respondents, and the stay order was vacated.
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