9911796707
TMI Blog2006 (6) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... an order shall subsist? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in remanding the penalty order back to the Assessing Officer to pass a fresh order under section 271(1)(c) of the Income-tax Act, 1961, after obtaining the approval of the Deputy Commissioner of Income-tax and thereby extending the time-limit for imposing penalty prescribed in section 275 of the Income-tax Act, 1961 relying on the decision of Guduthur Bros. v. ITO [1960] 40 ITR 298 (SC), which order was passed with regard to the penalty imposed under section 28(1)(a) of the Income-tax Act, 1922, where no time-limit for imposition of penalty was prescribed in the Income-tax Act, 1922? 3. Whether, on the facts and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner before passing the penalty order as enjoined by section 274(2)(b) of the Act. An appeal preferred by the Revenue before the Income-tax Appellate Tribunal, Cochin Bench, as I. T. A. No. 506/Coch./92 was allowed and the matter was remanded to the Assessing Officer with a direction to pass fresh orders for obtaining the approval of the Deputy Commissioner of Income-tax. It is the said order which is assailed in this appeal by the assessee. The advocate Sri S. Gopakumaran Nair, learned counsel appearing for the appellant/assessee, made the following submissions before us in support of the appeal. There was a change in the Assessing Officer during the course of the proceedings and the new incumbent who passed the penalty order did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principles of natural justice took place. Similarly, non-compliance of section 274(2) (b) in not obtaining the prior approval of the Deputy Commissioner would not also go to the root of the matter. It was only a curable defect. In CIT v. M. Sreedharan [1991] 190 ITR 604, a Division Bench of this court placing reliance on Guduthur Bros. case [1960] 40 ITR 298 (SC) and other decisions observed as follows: "Counsel for the Revenue submitted that the Tribunal was in error in simply affirming the orders passed by the Appellate Assistant Commissioner cancelling the penalties without giving a consequential direction that the matter may be reconsidered by the assessing authority after affording notice and opportunity to the assessee. No question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a decision afresh. As has been noted, before the Assistant Commissioner the counsel for the respondent had contended that the ex parte order should have been set aside because no notice had been received. When principles of natural justice are stated to have been violated it is open to the appellate authority, in appropriate cases, to set aside the order and require the Assessing Officer to decide the cases de novo. This is precisely what was directed by the Assistant Commissioner and the Tribunal, in our opinion, was clearly in error in taking a contrary view'." Equally misconceived is the appellant's argument that the Tribunal ought to have confirmed the appellate authority's order cancelling the penalty proceedings for the non-complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inspecting Assistant Commissioner for direction for payment of penalty and not for initiation of proceedings. It was a procedural defect and as such we are of the view that the Tribunal was right in holding that failure to obtain the previous permission from the Inspecting Assistant Commissioner of Income-tax for imposing the penalty under section 271(1)(c) is only a procedural error and it is not fatal to the order of penalty passed under section 271(1)(c) of the Income-tax Act, 1961; and the Tribunal was right in remanding the matter to the Income-tax Officer to pass fresh penalty order. The reference is answered in favour of the Revenue and against the assessee." The bar of limitation under section 275 of the Act is also not against ..... X X X X Extracts X X X X X X X X Extracts X X X X
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