9911796707
TMI Blog1979 (7) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... rm carrying on business in kirana and sundry goods. For the assessment year 1968-69, the assessee filed its return of income at Rs. 36,496. The ITO, noticing several discrepancies in the accounts, computed the total income at Rs. 53,510 and initiated penalty proceedings under s. 271(1)(c) of the I.T. Act, 1961, and referred the case to the IAC under s. 274(2) of the Act as the penalty leviable was more than Rs. 1,000. The case was posted before the IAC for hearing on June 7, 1971. The assessee sent a telegram to the effect that the managing partner was sick and prayed for an adjournment. The request for the adjournment by the assessee was refused by the IAC on the ground that the penalty proceedings were fast becoming barred by time, and le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sick and an adjournment was sought for on that ground. Though adjournment was refused on June 7, 1971, the order was passed by the IAC on 8th October, 1971. This itself establishes that the reason given by the IAC for refusing adjournment was not sustainable. Therefore, the Assistant Commissioner should have granted reasonable time to the assessee to make its representation in support of its stand that no penalty is exigible in the present case." The Tribunal is, therefore, right in its finding that the order of penalty passed by the IAC is liable to be set aside on that ground that no reasonable opportunity had been afforded to the assessee. So far the view of the Tribunal is correct. But we are not able to agree with its finding that " Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty ; and if the Tribunal comes to the conclusion that it was not vitiated by any violation of the rule of natural justice and the order of penalty has been found to have been passed after giving reasonable opportunity to the assessee, then it should have proceeded to determine the second question relating to merits as to whether the penalty levied by the IAC is valid and just. Where the Tribunal categorically finds that the order of the IAC levying penalty under s. 271(1)(c) is violative of the rules of natural justice and is liable to be set aside on that ground alone, it need not have gone into the other question on merits. On a careful consideration of the entire facts and circumstances, we are of the opinion that the question framed do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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