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TMI Blog1991 (3) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration in the connected cases. They relate to the assessment years 1973-74, 1974-75 and 1975-76. The respondent is an assessee to income-tax. For the assessment years 1973-74 and 1974-75, the Income-tax Officer initiated proceedings under section 271(1)(c) of the Income-tax Act, 1961, for alleged concealment of the particulars of income. For the assessment year 1975-76, the Income-tax Officer initiated proceedings under section 271(1)(a) of the Act for late filing of the return and under section 271(1)(c) of the Act for concealment of the particulars of income. That is why for the three assessment years, there were four proceedings and four appeals. Two appeals relate to the assessment year 1975-76. For all the years, penalties were levied by the Income-tax Officer under section 271(1)(c) of the Act and for the year 1975-76, penalty under section 271 (1) (a) of the Act was also levied. In the appeals filed by the assessee, the Appellate Assistant Commissioner held that the Income-tax Officer, who levied the penalty in all the four cases, is different from the Income-tax Officer who had completed the assessments and initiated the penalty proceedings and the officer who levied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in cancelling the penalties, following the decision in Smt. Chitra Mukherjee's case [1981] 127 ITR 252 (Cal). The orders passed by the Appellate Assistant Commissioner were confirmed by the Tribunal. It is thereafter at the instance of the Revenue that the two questions of law, formulated hereinabove, have been referred for the decision of this court. We heard counsel for the Revenue, Mr. P. K. R. Menon, and also counsel for the respondent-assessee, Mr. N. Sukumaran. Admittedly, in these cases, in pursuance of the notices issued by the Income-tax Officer under section 271 read with section 274 of the Act, the assessee filed his objections. Subsequently, there was a change in the incumbent of the office. The successor-Income-tax Officer, without any further notice to the assessee or hearing him, levied penalties under section 271(1)(c) for all the three years and also under section 271(1)(a) for the year 1975-76. The short question that arises for consideration is whether, in a case where the assessee has already filed his objections to the notices proposing to levy penalties, the change in the incumbent of the office necessitates a fresh notice to be given to the assessee or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions : Kanailal Gatani v. CIT [1963] 48 ITR 262 (Cal), Prabhudas Jagjivandas v. ITO [1965] 55 ITR 1, 16, 17 (Guj), A. C. Metal Works v. CIT [1967] 66 ITR 14 (Raj) and CWT v. Umrao Lal [1982] 136 ITR 49 (All). Counsel for the assessee, supporting the decision of the Appellate Assistant Commissioner and the Tribunal, placed strong reliance on the decisions in Anantha Naganna Chetty's case [1970] 78 ITR 743 (AP), Smt. Azizunnissa Begum's case [1979] 119 ITR 376 (AP), Smt. Chitra Mukherjee's case [1981] 127 ITR 252 (Cal) and Ram Saran Das Kapur v. CIT [1970] 77 ITR 298 (P H). It will be useful to extract section 271 (1) (a) and (c) and sections 274 and 129 of the Income-tax Act : "271. Failure to furnish returns, comply with notices, concealment of income, etc.-(1) If the Income-tax Officer or the Appellate Assistant Commissioner or the Commissioner (Appeals), in the course of any proceedings under this Act, is satisfied that any person (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber of contexts the courts have held natural justice to have been satisfied by an opportunity to make written representations to the deciding body, and there are still many situations where a person will be able to present his case adequately in this way." One of us had occasion to deal with the matter in detail in Indian Transformers Ltd. v. Asst. Collector [1983] KLT 861. Apart from the decisions referred to therein, we may also refer to a decision of the Supreme Court in Travancore Rayons Ltd. v. Union of India, AIR 1971 SC 862, 864, paragraph 7. It is trite law that, before a person is condemned or an adverse order is passed against him, he should be given an opportunity to be heard. It is in conformity with the principles of natural justice. It is "fairness in action". But the content of "natural justice" or "fairness" may be indicated in specific words in particular statutes. In cases where the statute requires that the party "should be heard" or "afforded an opportunity of being heard", will it be sufficient in all cases and in all situations, only to afford an opportunity to Me objections or representations against the proposed action ? We should say that it may not be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to exercise this right, it is implicit in the section that the succeeding authority should intimate to the assessee his intention to continue the proceeding from the stage at which it was left by his predecessor. The time taken in reopening the proceeding or in rehearing the assessee, is to be excluded in computing the period of limitation for the purposes of section 153 (Explanation 1(i) to section 153), section 263(2) (Explanation to section 263) and section 275 (Explanation (i) to section 275)." We are aware that the decisions referred to in paragraph 4 supra, have expressed in different terms the scope and content of section 271 read with section 274 and section 129 of the Act. On a careful analysis of the relevant decisions, we are of the view that the statement of the law by Kanga and Palkhivala at pages 1066 and 1657 (extracted hereinabove) represents the correct legal position. We adopt the same as our own. In this batch of cases, it cannot be denied that the succeeding assessing authority did not intimate to the assessee his intention to continue the proceeding from the stage at which it was left by his predecessor. There is no plea or proof in this case that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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