9911796707
TMI Blog1965 (3) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... tered firm at Vijayawada consisting of five partners. The assessment year is 1945-46 for which the accounting year is the Deepavali year ending on October 16, 1944. The assessee worked a groundnut oil mill on lease and carried on the business of manufacture and sale of groundnut oil and forward transactions in groundnuts and groundnut oil. It claimed to have paid losses amounting to Rs. 65,805 in forward transactions and returned an income of Rs. 39,764, after deducting the net loss. The Income-tax Officer found that the alleged payment of losses to the extent of Rs. 57,739 was not proved and that the losses were fictitious. He gave effect to this finding in his assessment orders dated January 31, 1948, and also initated proceedings to levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n losses ". He imposed penalties of Rs. 10,000 under section 28(1)(c) of the Income-tax Act, and of Rs. 20,000 under section 16 of the Excess Profits Tax Act. The appeals preferred by the assessee were dismissed by the Appellate Assistant Commissioner. On the assessee's further appeals to the Tribunal under section 33 of the Income-tax Act and section 19(2) of the Excess Profits Tax Act, a preliminary objection was taken by the department that as the findings in the assessment proceedings had become final, they were not open for reconsideration in the penalty proceedings. The Tribunal overruled this preliminary objection on the ground that the relevant considerations were different in penalty proceedings and that in view of the materials on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities so as to preclude the determination of a question in a previous assessment order from being reopened in proceedings relating to a subsequent assessment year : New Jehangir Vakil Mills Co. Ltd. v. Commissioner of Income-tax and Income-tax Officer v. Murlidhar Bhagwan Das. The reasons are, firstly, that the income-tax authorities including the Appellate Tribunal are not courts ; and, secondly, that the purpose and the subject-matter of the proceedings in a subsequent year are not the same as those in the previous year. In Seshadri v. Second Addl. Income-tax Officer, a Division Bench of Madras High Court held, after reviewing the authorities and considering section 37 and other provisions of the Income-tax Act, that the Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey cannot arbitrarily change the assessment simply on the ground that the succeeding officer does not agree with the preceding officer's finding. The position is just like the position of any two parties who have proceeded on a certain basis in their relations. It may be open to one party to reopen the matter. But if he wants to do so, there should be facts which would entitle him to do it. If fresh facts come to light which on an investigation would entitle the Income-tax Officer to come to a different conclusion from that of his predecessor, we think he is entitled to reopen the question. But if there are no fresh facts, it is difficult to see how he can arbitrarily go behind the finding of his predecessor. The same principles of natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the penalty proceedings relate to the same assessment year. But the subject-matter and the purpose of the assessment proceedings under section 23 of the Income-tax Act is to assess the total income of the assessee and determine the tax payable by him. The purpose of proceedings under section 28 is different and when action is taken under section 28(1)(c), the question for determination is whether the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income. Generally speaking, there is no eadem questio in the two proceedings, although it might happen in a given case that the question for determination in the penalty proceeding was actually decided in the assessment proceeding. Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f and quite another thing to say that it is conclusive. He has not been able to cite any authority for the position that earlier findings relating to the same assessment year would be conclusive. In R. C. No. 18 of 1960, decided on December 8, 1961, a Division Bench of this court, while repelling the contention that an independent enquiry is necessary in the penalty proceedings before a levy could be justified, observed : " In the circumstances, there is no justification for the contention that the previous proceedings cannot form the basis for the penalty proceedings. " We do not consider that by this observation the learned judges intended to lay down that the determination of matters in previous proceedings is conclusive in penalty p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
