9911796707
TMI Blog1987 (8) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... he year 1972-73 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the penalty order under section 271(1)(c) of the Income-tax Act, 1961, passed on March 27, 1976, was within the period of limitation provided under section 156 even if the notice of demand under section 156, though unsigned, was served on the assessee on December 20, 1977 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the service of demand notice in relation to the penalty order could be made after the limitation period prescribed under section 275 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is right in cancelling the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result, the Income-tax Officer, vide his order dated March 28, 1974, made the assessment, inter alia, disallowing the expenditure of Rs. 15,429 and directed that notices under sections 271(1)(c) and 274 of the Act for imposition of penalty be issued to the assessee. Subsequently, after hearing the assessee and considering its explanation, the Income-tax Officer made an order under section 271(1)(c) of the Act on March 27, 1976, levying a penalty of Rs. 15,429. Aggrieved, the assessee went up in appeal before the Appellate Assistant Commissioner. It questioned the imposition of penalty both on merits and on technical grounds. So far as the merits of the order were concerned, the Appellate Assistant Commissioner held that there was sufficien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Assistant Commissioner upholding the view of the Income-tax Officer that on merits the Income-tax Officer was justified in levying penalty on the assessee. The Income-tax Appellate Tribunal by its order dated February 23, 1985, upheld the Appellate Assistant Commissioner's decision that, in the circumstances, a case had been made out for levying of penalty against the assessee. It concluded that in the instant case, the penalty order had been made on March 27, 1976, well within the period of limitation prescribed therefor under section 275 of the Act. It was merely the demand notice, following assessment of penalty, which was served upon the assessee on December 20, 1977 (a date which fell beyond the period of limitation prescribed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quential action. Requirement of law under section 275 is only of passing the penalty order within the specified period. Accordingly, no referable question on this point arose. Question No. 3 Was merely consequential to the first two questions and the Tribunal did not consider it necessary to discuss the same any further. In the result, the Tribunal rejected the reference application under section 256(1) of the Act filed by the assessee. The assessee has now invoked the jurisdiction of this court under section 256(2) of the Act and prays that the Tribunal should be directed to state the case and refer the abovementioned five questions of law formulated by it for the opinion of this court. So far as the fourth and fifth questions relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action of the Income-tax Officer in raising a demand in pursuance of the penalty order, under section 156 of the Act. Accordingly, any question regarding the validity of the notice of demand, following imposition of penalty under section 271(1)(c) of the Act, could not fall within the purview either of the appeal filed by the assessee, against the order made under section 271 (1)(c) of the Act, before the Appellate Assistant Commissioner, or that of the second appeal disposed of by the Income-tax Appellate Tribunal. In these appeals, the two authorities were not directly concerned with the validity or otherwise of the notice of demand. They were concerned merely with the validity of the order passed by the Income-tax Officer under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvalid. They merely held that the delay renders the demand invalid. As already observed, any question regarding the validity of the notice of demand served upon the assessee falls outside the purview of the appellate order made by the Appellate Assistant Commissioner and the second appellate order passed by the Income-tax Appellate Tribunal. Such a question, therefore, cannot be said to arise out of the appellate order of the Income-tax Appellate Tribunal and no statement of case in respect thereof can be called for. It is, accordingly, not necessary for us to consider the question as to whether or not any delay in serving the notice of demand after the making of the penalty order under section 271(1)(c) of the Act renders such notice inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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