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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 ..... uch reasonable opportunity of being heard ? (2) Whether the imposition of the same penalty even when the maximum leviable has been lowered was justified ?" The material facts are as follows: The assessee deals in cardamom, stationery and sundry articles in Sakalespur in Mysore State. He also derives income from other businesses. For the assessment year 1957-58, it returned a loss of ₹ 4,961 from those businesses. The Income-tax Officer 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial portion of section 28 says : "28. (1) If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, in the course of any proceeding under this Act, is satisfied that any person-. . . (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, he or it may direct that such person shall pay by way of penalty, in the case referred in clause (a), in addition to the amount of the income-tax and super-tax, if any, payable by him, a sum not exceeding one and a half times that amount, and in the cases referred to in clauses (b) and ( c), in addition to any tax payable by him, a sum not exceeding one and a half times the amount of the income-tax and supe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 written representation. That written representation wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings the assessee had been given notice under section 28(3). The assessee appeared before him through his counsel and made oral representations before that officer. Before that officer could pass an order in that proceeding, he was transferred. The succeeding officer proceeded to pass orders without again hearing the assessee. The court held that the procedure adopted by the succeeding officer is not in consonance with law. In that connection, it observed thus : "In a penalty proceeding the assessee has a statutory right of being heard under section 28(3). This hearing consists of the right of adducing evidence as also of advancing arguments whereas an assessee in an assessment proceeding has the right of only producing evidence under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... response to that notice the assessee made a written representation. His advocates appeared and stated that "beyond his written statement filed in the matter he has nothing to add". Thereafter the Income-tax Officer prepared a draft order for imposition of the penalty and submitted the same to the Inspecting Assistant Commissioner. In the meanwhile he was transferred. His successor-in-office after obtaining the necessary sanction from the Inspecting Assistant Commissioner issued the penalty order. The High Court held that the order in question is a valid order. But the court went further and observed: "A hearing of a case may be of many kinds. It usually involves the calling of witnesses, their examination and cross-examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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