9911796707
TMI Blog1981 (9) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction over the order of the ITO dated 23-3-1979 which is appealed against, vested with the Commissioner (Appeals). The learned departmental representative contended that the AAC erred in cancelling the penalty. He pointed out that the suppression of purchases was detected by the sales tax department on 27-11-1975, long before the completion of the original income-tax assessment, and that, therefore, the AAC has erred in observing that the assessee was not aware of the difference in stock particulars before the assessment was finalised by the sales tax department. On behalf of the assessee, the learned counsel Shri Anjaneyulu submitted than an assessee has the option to file appeals either before the AAC under section 246(1) or before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in these circumstances there was no question of concealment of any income on the part of the assessee. He, therefore, strongly urged that the order of the AAC should be confirmed. He also relied upon the ruling of the Andhra Pradesh High Court in the case of Addl. CIT v. Bhrugupalli China Krishnamurthy (Decd.) [1980] 121 ITR 326. In reply the learned departmental representative submitted that the word "may" occurring in section 246(1) and (2) cannot be interpreted in the manner suggested by the learned counsel of the assessee. In this connection he drew our attention to section 247 in which the Legislature has provided for filing of appeals by partners of a firm who are individually assessable on their shares in the total income of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g orders of an Income-tax Officer may appeal to the Appellate Assistant Commissioner against such order--- (o) an order imposing a penalty under--- (iii) section 271, or (iiia) section 271A, or" A plain reading of the above provisions clearly shows that after the introduction of sub-section (2), an appeal against an order of penalty which was imposed with the previous approval of the IAC under the proviso to clause (iii) of section 271(1), would lie only to the Commissioner (Appeals). We are unable to agree with the submission of the learned counsel for the assessee that the assessee is given an option to choose either the AAC or the Commissioner (Appeals) for preferring appeals against the order under section, 271. The word "may" o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the appellant may demand that before proceeding further with the appeal or matter, the previous proceeding or any part thereof be reopened or that he be reheard." This sub-section shows that even if an appeal was filed and the same was pending before that date before the AAC under section 246, as it stood prior to the coming into force of the above amendment with effect from 10-7-1978, that appeal would stand transferred on that appointed day to the Commissioner (Appeals) and thereafter the Commissioner (Appeals) only has jurisdiction to decide that appeal. If the argument of the learned counsel for the assessee to the effect that the AAC and the Commissioner (Appeals) have concurrent jurisdiction and that, therefore, it is open to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders of the ITO and exercise of that jurisdiction was not made conditional upon the competence of the ITO to pass orders made appealable. The Supreme Court further observed that the AAC had as a court of appeal jurisdiction to determine the soundness of the conclusions of the ITO both on questions of fact and law and even as to his jurisdiction to pass the order appealed from. In the instant case, we have already held that the AAC has no jurisdiction to pass the order appealed in this case. The learned counsel for the assessee has drawn our attention to the latest judgment of the Hon'ble Supreme Court in Kapurchand Shrimal v. CIT [1981] 131 ITR 451. The Hon'ble Supreme Court in the course of the above judgment referred to the duty of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Calcutta High Court would not apply to the facts of this case. He submitted that in that case the order passed by the Tribunal was held to be void but the Tribunal had jurisdiction to entertain the appeal and, therefore, the said decision would not apply to this case. 5. After perusing the recent judgment of the Supreme Court referred to above and cited on behalf of the assessee and after considering the rival submissions with reference to the direction to be given in this case, we find that the dictum laid down by the Supreme Court in the latest judgment referred to above has to be followed. As pointed out above the Supreme Court has laid down the dictum that "an appellate authority has the jurisdiction as well as the duty to co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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