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Issues:
Whether the Income-tax Appellate Tribunal rightly cancelled the penalty order under section 271(1)(a) of the Income-tax Act, 1961 due to a procedural issue regarding the issuance of a fresh show-cause notice by the successor-Income-tax Officer. Analysis: The case involved a situation where the assessee had defaulted in filing the return for the assessment year, leading to the initiation of penalty proceedings under section 271(1)(a) of the Income-tax Act, 1961. The successor-Income-tax Officer, without issuing a fresh show-cause notice, levied a penalty after the previous officer had not taken any action. The assessee challenged the penalty order on the grounds that a fresh show-cause notice was required before imposing the penalty. The Tribunal agreed with the assessee's contention and cancelled the penalty order. The judgment referred to section 129 of the Act, which allows a succeeding income-tax authority to continue proceedings but grants the assessee the right to demand to be heard before any order is passed against them. This provision is similar to those in the Indian Income-tax Act, 1922, and the Wealth-tax Act, 1957. The court cited a previous case to emphasize that the succeeding officer has the authority to pass an order based on the explanation provided before the predecessor if the assessee did not demand the proceeding to be reopened. Additionally, the judgment highlighted a previous decision by the court in a similar matter, where it was held that the succeeding authority was not required to afford the assessee another opportunity of hearing if the assessee had not put in any appearance or filed any written explanation. The court upheld the decision based on previous rulings and concluded that the Tribunal was incorrect in cancelling the penalty order. Therefore, the question referred by the Tribunal was answered in the negative, against the assessee, with no order as to costs. In conclusion, the judgment clarified the procedural aspects regarding the continuation of proceedings by a succeeding income-tax authority and the rights of the assessee in such situations. It emphasized the authority of the succeeding officer to pass orders based on the previous proceedings if the assessee did not demand a reopening of the case.
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