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TMI Blog1963 (7) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... came to the conclusion that the assessee had concealed an income of ₹ 41,900. The order of the Income-tax Officer in this regard was substantially affirmed by the Appellate Assistant Commissioner. When the matter was taken up in appeal to the Income-tax Appellate Tribunal, it held that the concealed income was ₹ 21,900 and not ₹ 41,900. During the pendency of the assessment proceedings before the Appellate Tribunal, the Income-tax Officer commenced proceedings under section 28(3) of the Act. On January 17, 1958, he issued a notice to the assessee under section 28(3) calling upon him to appear before him on February 14, 1958, and show cause why penalty should not be levied on him. By his letter dated February 13, 1958, the assessee asked for time. The time asked for was granted. Ultimately the assessee sent his explanation in writing on April 24, 1958. He did not choose to appear in person before the Income-tax Officer nor was any opportunity to adduce oral evidence or to address arguments asked for. Before any orders could be passed in the penalty proceedings, the concerned Income-tax Officer was transferred but his successor continued the proceedings. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard :.... A Bench of this court in Writ Petition No. 311 of 1960 (Venkatarayappa Sons v. Income-tax Officer, Kolar Circle)held the wordings of section 5(7C) are also applicable to penalty proceedings. In the instant case, the assessee had not demanded any reopening of the case as contemplated under the first proviso to section 5(7C). The only grievance of the assessee is that the succeeding Income-tax Officer did not give him a fresh opportunity of being heard. Is he entitled to such an opportunity ? A combined reading of sections 28(3) and section 5(7C) makes it clear that a penalty proceeding can be continued by the succeeding Income-tax Officer from the stage where it was left by the previous Income-tax Officer. This is also what this court held in W.P. No. 311 of i960. As seen earlier, the assessee had been given an opportunity of being heard in the penalty proceedings. He did not think it necessary to have a personal hearing nor did he think it necessary that he should adduce any evidence before the Income-tax Officer to satisfy the Income-tax Officer that the view taken by him that the assessee had concealed any income is not correct. He was content to make a wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corresponding to section 28(3) which enacts that no order of penalty shall be made 'unless the assessee . . . has been heard or has been given a reasonable opportunity of being heard.' Section 5(7C) enacts that the succeeding income-tax authority may continue the proceeding from the stage at which it was left by its predecessor-in-office. The combined effect of the two sections is to authorise the succeeding Income-tax Officer to pass an order upon the evidence produced before his predecessor-in-office but the effect is not to authorise the former to pass an order upon arguments advanced before the latter. This conclusion appears to be obvious. It will be a mockery if it is held that one officer could hear the arguments and another officer could decide the case. But this principle of law is inapplicable in cases where the officers concerned have only to see the written representation. From what has been stated above, it is clear that Sri Srinivasan cannot take any assistance from the decision of the Calcutta High Court, referred to above. This aspect is made abundantly clear by the latter decision of the Calcutta High Court in Kanailal Gatani v. Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d like to refer to the decision in Murlidhar Tejpal v. Commissioner of Income-tax [1961] 42 ITR 129 . Therein a Bench of the Patna High Court ruled that when one Income-tax Officer initiates penalty proceedings against an assessee under section 28 of the Income-tax Act and gives him an opportunity of being heard, the assessee submits a written explanation, and later the Income-tax Officer is succeeded by another but the assessee fails to exercise his right under section 5(7C)to have the proceedings reopened, the successor has authority to pass an order imposing penalty without calling for fresh explanation from the assessee. We are in respectful agreement with that decision. The first question submitted to us does not correctly bring out the controversy between the parties. With the consent of the parties, we have modified that question in the following manner : Whether on the facts and circumstances of this case, it was incumbent on the officer passing an Order under section 28(1)(c) to hear the assessee or to afford him a fresh opportunity of being heard before passing the penalty order even though his predecessor had given reasonable opportunity to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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