9911796707
TMI Blog1983 (1) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. During the process of assessment, the ITO scrutinised the books of account of the assessee and noticed a loan amount of Rs. 20,000 incorporated in the books of account in the name of M/s Bharat House, Chaura Bazar, Ludhiana. An amount of Rs. 1,500 had also been debited as interest on the said loan. The amount of loan had been introduced on 6th Oct., 1967., The entry had been reversed on 16th Aug., 1968. A certificate dt. 15th July, 1967 signed by Shri Ranjit Singh as proprietor of M/s Bharat House, was filed in support of this entry. It appears that in the assessment proceeding of some case the ITO recorded the statement of Ranjit Singh who averred that he had not done any money lending to any party. He also stated that he had been lending only his name so as to enable other parties to introduce funds in their books of account. The ITO, therefore, asked the assessee to prove the source of this amount entered in its books of account. 4. The assessee requested the ITO to issue summons under s. 131 to Ranjit Singh as a witness. Shri Ranjit Singh appeared and his statement was recorded by the ITO on 10th Jan., 1972., In this statement, that stated he had not lent any amount in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding on this issue. He simply allowed the appeal of the assessee and deleted the entire penalty. As the appeal of the assessee was accepted in entirety, we agree with Mr. Kohli that the assessee was not aggrieved by the order of the AAC and, therefore, the assessee was not required to file any appeal against the order of the AAC. In these circumstances, we think that it is necessary to send the mater back to the AAC who may record a finding as to whether the penalty imposed by the ITO was excessive or appropriate. We, therefore, set aside the order of the AAC and restore the matter back to his file with the direction that he shall record a finding on the limited issue as to whether the penalty levied by the ITO is excessive or reasonable." The assessee filed a reference application but the same was dismissed by the Tribunal vide order in RA No. 16/ASR/1978-79 dt. 10th July, 1978. The assessee had also filed an application under s. 254 of the IT Act with the prayer to the Tribunal that a legal objection having been raised in the grounds of appeal before the AAC was not disposed of by the latter and since the case had been sent back to the AAC the assessee would like to press t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty is imposed for concealment of particulars of income it is the law ruling at the date on which the act of concealment takes place which is relevant. On the date, according to him, when the return dt. 12th Aug., 1968 was filed, the jurisdiction to levy the penalty in cases where the minimum penalty leviable exceed Rs. 1,000 lay with the IAC and not the ITO. Since in this case, the penalty has been levied by the ITO and not by the IAC, the entire proceedings are bad in law. The penalty order, therefore, should have been cancelled by the CIT (A). He contended that he had a right to raise this legal issue because it does not require any enquiry on facts. He also submitted that may be, without concession, the CIT (A) felt bound by the directions of the Tribunal but he is entitled to raise any legal ground before the Tribunal when the matter has again travelled back to it. He, however, submitted that the issue of legality of the proceedings had clearly been raised before the CIT (A) originally the AAC in ground No. 5 which have been abstracted by the CIT (A) in para 7 of his impugned order. The orders of the authorities below may, therefore, be cancelled. 9. The Revenue, on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty. The Revenue, however, submitted that in view of the decision of the Tribunal earlier confirming the addition of the amount to the total income of the assessee and the observations during the penalty proceedings when the matter was sent back to the file of the CIT (A) that penalty is exigible, there is no case for deletion of the penalty on merits which the assessee is pleading. 12. We have given careful consideration to the rival submissions. We have also carefully perused the authorities cited from both the sides. Insofar as the position of law with regard to imposition of penalty is concerned, it has been settled by the Hon'ble Supreme Court in the case of Brij Mohan (1979) 12 CTR (SC) 198 : (1979) 120 ITR 1 (SC). In this judgment the Hon'ble Court has clarified that the law applicable to the process of assessment and the law relating to imposition of penalty are in two distinct spheres and this is how the Hon'ble Court had observed : "The case of the assessee is that an assessment proceedings for the determination of the total income and the computation of the tax liability must ordinarily be made on the basis of the law prevailing during the assessment year, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee did not include the income from cash credits which were subsequently held to form part of the total income of the assessee for the year under appeal and by the exclusion of which from the original income returned on 12th Aug., 1968 the income liable to tax had been kept out. Moreover the actual result of the assessment has nothing whatsoever to do with the attempt made by the assessee to conceal the particulars of his income in his first return by which he deliberately furnished inaccurate particulars of his income as observed by the Bombay High Court in the case of Dayabhai Girdharbhai (1957) 32 ITR 677 (Bom). This position of law, however, has to be applied to the facts of this case and it is to be seen that how far the penalty levied can be sustained. 14. The issue that is before us has two aspects, the legal aspect and the factual aspect. Before we go to the factual aspect, we have to consider the legal aspect. In this regard, we are in agreement with the ld. counsel for the assessee that a question of law can be raised by either party at any state of the appellate proceedings only subject to the condition that its determination should not require a fresh enquiry i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
