9911796707
TMI Blog1980 (8) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961, and imposed a penalty of Rs. 11,051. The assessee, being aggrieved by the said order, appealed to the AAC. The assessee raised three contentions : (i) that notice under s. 274 was never served on the assessee ; (ii) that she was not informed of the change of the incumbent in office and that deprived her of the right to claim the reopening of the penalty proceedings; and (iii) that the successor-ITO had no authority to pass the penalty order as the assessee had not been heard as required under s. 274 of the Act. The AAC rejected the first two contentions of the assessee on the ground that the assessee had been served with a notice under s. 274 and that as she did not claim the reopening of the penalty proceedings according to the proviso to s. 129 she lost her right to claim the reopening of the penalty proceedings. With respect to the third contention, the AAC held that the successor ITO acted without authority in imposing the penalty as the assessee had not been heard as required by s. 274 of the I.T. Act, 1961. Being aggrieved by the said order of the AAC, the revenue went up in appeal before the Tribunal. After considering the rival contentions urged and after takin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. Act, 1961, provides as follows : " Change of incumbent of an office.-Whenever in respect of any proceeding under this Act an income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor: Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be re-heard." In this connection, in view of the contention urged in this case, it may be appropriate to refer to s. 5(7C) of the Indian I.T. Act, 1922, which is more or less in similar terms with s. 129 of the I.T. Act, 1961, and it provided as follows: " 5. (7C) Whenever in respect of any proceeding under this Act an income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor : Provided that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's appeal to the Tribunal was dismissed. On a reference to this court, it was noted that it was contended on behalf of the assessee that there was non-compliance with s. 5(7C) of the Act of 1922 inasmuch as the assessee was not given a fresh hearing. Under s. 33B, it was necessary to pass the impugned order within two years from the date of assessment. It was emphasised that under s. 5(7C) the assessee had a right to ask for a re-hearing by the changed Commissioner. But the assessee did not ask for a hearing personally, but wanted time to adduce evidence. It was not the assessee's case in the High Court that he had additional evidence on September 4, 1963. As was pointed out by the Tribunal, the assessee wanted to delay the passing of the order so that it could be barred by limitation. In the circumstances, there was no non-compliance with the provisions of s. 5(7C) as was rightly held by the Tribunal. This court observed at page 957 of the report as follows : " Counsel for the assessee contended before us that in this case there was non-compliance with section 5(7C) of the Indian Income-tax Act, 1922, inasmuch as the assessee was not given any fresh hearing. It has to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to refer to the decision of the Andhra Pradesh High Court in the case of Anantha Naganna Chetty v. CIT [1970] 78 ITR 743, which is a case of penalty under s. 28(3) of the Indian I.T. Act, 1922. The Calcutta High Court in the case of Kanailal Gatani v. CIT [1963] 48 ITR 262 was concerned with a situation which was different from the present case. There the ITO had issued notice to the assessee to show cause why a penalty should not be imposed and, after hearing the assessee, made a draft order for the imposition of penalty. He was then transferred and his successor, after looking into the papers, concurred with the order of his predecessor and made an order imposing penalty after getting the sanction of the AAC. It was held by this court that the order of penalty was not invalid merely because the succeeding officer who made the order had not heard the assessee himself. There, Sinha J. observed that the hearing of a case might be of many kinds. It might involve the calling of witnesses, their examination and cross-examination and then advancing arguments. Where witnesses had been called and examined or where the arguments had been advanced, it was clear that one man could not h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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