1974 (12) TMI 12 - HC - Income Tax

Summary

Issues involved: Jurisdiction of the Income-tax Officer to impose penalty u/s 28(1)(c) without requisite approval and the power of the Appellate Assistant Commissioner to give directions in the appellate order.

Jurisdiction of Income-tax Officer: The Income-tax Officer imposed a penalty of Rs. 15,000 u/s 28(1)(c) without the requisite approval from the Inspecting Assistant Commissioner, as the approval was sought after the penalty order was passed. The Appellate Assistant Commissioner directed the Income-tax Officer to take necessary action according to law, leading to confusion. The Tribunal held that the Income-tax Officer cannot proceed for penalty imposition solely based on the Appellate Assistant Commissioner's direction if he lacked jurisdiction. The Tribunal justified setting aside the direction due to confusion caused by the appellate order.

Power of Appellate Assistant Commissioner: The Tribunal referred the question of whether it was right to cancel the direction of the Appellate Assistant Commissioner in his order against the penalty imposed u/s 28(1)(c). Section 31(3)(f) confers appellate jurisdiction over orders u/s 28, but does not empower the Appellate Assistant Commissioner to give directions like the one in this case. The Tribunal interpreted that the Appellate Assistant Commissioner exceeded his jurisdiction by giving such a direction, leading to the cancellation of the direction and allowing the assessee's appeal.

Conclusion: The High Court affirmed the Tribunal's decision, stating that the Appellate Assistant Commissioner's direction was beyond his jurisdiction, and the Income-tax Officer cannot proceed with penalty imposition based solely on such a direction. The Court ruled in favor of the assessee, holding that the Tribunal was justified in setting aside the direction. The assessee was awarded costs amounting to Rs. 200.