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TMI Blog1967 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... at a place called Rani and then sold through one Tejraj Jaswantraj to a Bombay party in the assessment year 1957-58 to which the present reference relates. Out of the amounts realised from these sales, Rs. 9,650 was credited by the assessee to the machinery account and Rs. 13,279 to the capital account. When the assessee was asked to explain these entries, it was submitted by him that these were sales of unutilised construction materials. The invoices for these sales, however, showed that they were sales of machinery parts. When Tejraj Jaswantraj was examined, he stated that the items dealt with were aero-scraps. As against the return income of Rs. 6,012, the assessee was therefore assessed on a total income of Rs. 47,489 which included the above amount of Rs. 22,929. Thereafter, the Income-tax Officer took proceedings against the assessee under section 28(1)(c) read with section 28(3) of the Act and issued a notice dated February 24, 1959, to show cause why an order imposing penalty should not be made against him for concealment of particulars of income. The Income-tax Officer, who issued this notice, was Shri B. R. Kumbhat. The assessee was requested to appear on March 24 1959, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appear before him and show cause against the imposition of penalty on him, the assessee did not care to appear before him on the appointed date. He simply sent a written reply and instead of giving any reasonable explanation as to why the income amounting to Rs. 22,929 should not be treated as concealed income, he remained content by giving a bare denial. Learned counsel proceeds to say that in a case where the assessee files only a written reply and does not ask for a personal hearing, it is not necessary for the successor of that officer to give another opportunity of showing cause before imposing penalty. We have given due consideration to the arguments advanced by the learned counsel on either side. We agree with learned counsel for the respondent that in a case where one Income-tax Officer issues a notice under section 28(3) of the Act to an assessee calling upon him to show cause why penalty should not be imposed under section 28(1) of the Act and the assessee remains content with submitting his explanation in writing but does not choose to appear before the Income-tax Officer or does not ask for an opportunity to adduce evidence or address arguments, nor demands rehearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was made. In Kanailal Gatani's case the assessee was served with a notice and called upon to show cause by March 10, 1947, why a penalty under section 28 of the Act should not be imposed for concealing the particulars of his income deliberately. On 10th March, 1947, the assessee filed a written reply. On further time being allowed, a written statement was filed on May 3,1947. Thereafter, Mr.A. De was transferred and another officer, Mr. S. N. Roy, came in his place. The succeeding officer imposed penalty and a question arose whether the imposition of penalty by the succeeding officer who did not hear the assessee was legal. It was observed that : " A hearing of a case may be of many kinds. It usually involves the calling of witnesses, their examination and cross-examination and then arguments are addressed to the Tribunal. Where witnesses have been called and examined, or where arguments have been advanced, it is clear that one man cannot hear the case and another man pass judgment. The reason is that much may depend on the view that the Tribunal takes as to credibility of witnesses and his mind may be swayed one way or the other by the demeanour of witnesses and as a result of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer to take a fresh explanation from him before making any order of penalty. But the admitted position is that in the present case the assessee did not exercise his statutory right under section 5(7C). The result, therefore, is that Shri V. Jha had authority to make an order of penalty under section 28(1)(c) of the Income-tax Act, without calling for a fresh explanation from the assessee. " In Shop Siddegowda and Family v. Commissioner of Income-tax the learned judges followed the view expressed by the Patna High Court in Murlidkar Tejpal v. Commissioner of Income-tax referred to above. They also followed the earlier, view of the Bench of that court in Venkatarayappa and Sons v. Income-tax Officer, Kolar Circle (Writ Petition No. 311 of 1960), in which it was held that " the wordings of section 5(7C) were also applicable to penalty proceedings. " The same view was reiterated in Hulekar & Sons v. Commissioner of Income-tax. We respectfully agree with the view expressed in Murlidhar Tejpal v. Commissioner of Income-tax and Shop Siddegowda and Family v. Commissioner of Income-tax referred to above. It has already been pointed out above that after Shri B. R. Kumbhat issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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