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TMI Blog1975 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... to state a case and refer the following questions for opinion of the court : " (1) Whether, in the facts and circumstances of the case, the Appellate Assistant Commissioner under section 251(b) of the Income-tax Act, 1961, had power and jurisdiction to validate and enhance the order of penalty imposed under section 271(1)(a) which is not in conformity with the provisions of the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In assessee's appeal before the Appellate Assistant Commissioner, the appellate authority noticed that the Income-tax Officer had committed error in calculation of the period of default and had also overlooked the provision of section 271(2) of the Act. Accordingly, the appellate authority issued notice of enhancement and rectified the mistake by enhancing the penalty to a sum of Rs. 4,290 involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposition of penalty by the Income-tax Officer was a nullity and, therefore, the order which was a nullity could not be rectified by the appellate authority. In support of his contention Mr. Ray cited two decisions. The first one is the case of Padgilwar Brothers v. Commissioner of Income-tax [1971] 81 ITR 258 (Bom). The Bombay High Court was considering in the facts of the case the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred jurisdiction to initiate a proceeding for imposition of penalty. Once it is conceded that the appellate authority had jurisdiction to rectify the defect appearing in the order of the Income-tax Officer and in case rectification required enhancement, the first appellate authority having that power, an enhancement made by the first appellate authority by following the requirements of law ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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