9911796707
TMI Blog1985 (3) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... 975-76 were filed by the assessee on 17-2-1979 resulting in delays of 67, 55 and 43 months respectively. Assessments for the assessment years 1973-74 and 1974-75 were completed on12-2-1980while that of the assessment year 1975-76 was completed on11-3-1980. Along with the demand notices and the assessment orders for the three assessment years, the assessee had also been served notices under section 18(2) calling upon him to explain why penalties be not imposed under section 18(1)(a) for late submission of returns. In response to those show-cause notices, no replies had been sent by the assessee. Subsequently, the WTO sent another set of notices on22-2-1982. Since no reply had been received by the WTO to any one of the notices issued by him, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, and are bad in law. In view of the above situation, I am unable to sustain the orders, and the same are hereby directed to be cancelled." 3. Shri J.S. Rao, the senior departmental representative, has contended that there was no basic illegality attached to the orders passed by the WTO imposing penalties and that in fact the show-cause notices had been actually served upon the assessee which were defied inasmuch as the assessee never appeared to submit any replies thereto. On the other hand, Shri P.N. Monga, the learned authorised counsel of the respondent, has by his elaborate arguments supported the order of the AAC and assailed those passed by the WTO. Even though Shri Monga has on instruction from his client accepted the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a maintains that it was incumbent upon the second WTO to have granted an opportunity of being heard before imposing any penalties and since he had failed to do so, no flaw could be found in the combined order of the AAC cancelling the penalties. Referring to the decision of the Hon'ble Supreme Court in the case of Guduthur Bros. v. ITO [1960] 40 ITR 298, the learned counsel submits that facts were wholly different in that case. It is also submitted by him that that decision would not be applicable under the provisions of the Income-tax Act, 1961 (' the 1961 Act ') where the limitation provisions were brought on the statute book in contradistinction to the provisions of the Indian Income-tax Act, 1922 (' the 1922 Act ') which did not provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he record of the wealth-tax proceedings for the assessment years 1973-74, 1974-75 and 1975-76 has also been perused by us. On going through the records of the WTO we have firstly satisfied ourselves that notices under section 18(2) had been issued and served upon the assessee in respect of all the three assessment years. These notices under section 18(2) had been sent along with copies of the assessment orders and demand notices for the three assessment years. Secondly, we find on examination of postal acknowledgment slip and the copies of the notices issued on22-2-1982that the latter had been served by the postal authorities on someone on3-3-1982. The communication dated22-2-1982fixing hearing of the penalty proceedings on4-3-1982had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the proceeding was left by his predecessor : Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard." In the present case the succeeding WTO had, in accordance with the above provisions, jurisdiction to continue with the penalty proceedings from the stage at which the proceedings had been left by his predecessor-in-office. An assessee can demand that before the proceedings are continued by the successor-in-office he should be reheard. That situation, however, does not prevail in the present case. Here as stated earlier the assessee had in spite of the fact that notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar. The mere fact that no limitation was provided for completion of penalty proceedings under the 1922 Act would not, according to us, make any difference to the applicability of the decision of the Hon'ble Supreme Court under the provisions of the 1961 Act. We have one through the Maxwell's commentary on the Interpretation of Statutes and in particular through that portion of the book on which reliance has been placed by the learned counsel of the assessee. We would agree that the provisions regarding penalty proceedings must be strictly construed and that the compliance of procedural provisions must be stringently exacted. But here in this particular case where in fact the notices to show cause had been admittedly received by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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