TMI Blog1996 (2) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee levied Rs. ---------------------------------------------------------- 87-88 1611/A/91 Shri C.C. Patel 1,860 87-88 1612/A/91 Smt. S.V. Patel 3,470 88-89 1613/A/91 Smt. S.V. Patel 6,870 ---------------------------------------------------------- 3. The Dy. CIT(A) confirmed these penalties 4. The learned counsel for the assessee submitted that the penalty levied by the Assessing Officer is not valid. The nature of default was not indicated in the notice. The Officer who earlier gave a show-cause notice was transferred and no fresh show-cause notice was issued by the successor who imposed the penalty. It was pointed out by him that the notice dated 3-7-1989 (copy at pg. 10 of paper book) was issued by Shri P.C. Shah, the then I.T.O. The assessee duly submitted reply dated 27-7-1989 in which it was pointed out that the earlier show cause notice dated 14-2-1989 referred to in ITO's notice dated 3-7-1989 was not received by the assessee and it was requested that copy of that notice dated 14-2-1989 may be supplied, so that the assessee can submit appropriate reply to the said show cause notice. The penalty wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear under consideration increased to Rs. 41,387. The assessee declared total income in the year under consideration at Rs. 1,17,854 excluding income from agriculture of Rs. 4,031. The difference between the income shown in the estimate and the income shown in the return of income is mainly on account of substantial increase in the share income of M/s. J.B. Packaging which could not have been foreseen by the assessee. He placed reliance on the decisions in CIT v. S.B. Electric Mart (P.) Ltd. [1981] 128 ITR 276/6 Taxman 270 (Cal.) and CIT v. Birla Cotton Spg. Wvg. Mills Ltd. [1985] 155 ITR 448/22 Taxman 407 (Cal.) to support his contention that under such facts and circumstances, no penalty could be levied for alleged failure to file higher estimate of income. In the alternative, the learned counsel for the assessee requested that the penalty if found to be leviable, only the minimum penalty should have been levied, under the afore-stated facts and circumstances. 5. The learned departmental representative invited our attention towards section 129 of I.T. Act, 1961 which provides that whenever an I.T. Authority ceases to exercise jurisdiction and is succeeded by another who has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1986. Moreover, the Hon'ble Gujarat High Court in that case had observed that the assessee did not furnish any evidence to show that the books of accounts of the firm were not ready or that the assessee's share income was not worked out in time. In the present case the penalty has been levied by the Assessing Officer without giving any show-cause notice. In response to the earlier notice, the assessee had asked for a copy of the earlier show cause notice, so that the assessee can submit appropriate reply to the said show cause notice. A copy of original show-cause notice was not supplied to the assessee in spite of a specific requirement. The learned counsel thus strongly urged that penalties in these cases should be cancelled. 7. The facts in the case of Smt. Sobhnaben V. Patel for assessment years 1987-88 1988-89 were broadly the same. The main reason for difference between the income shown in the estimate furnished in the prescribed form No. 29 for these two years were also stated to be due to increase in the share income in the years under consideration as compared to the share income in the immediately preceding year. The assessee had also raised a similar legal ground i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y so levied by the successor ITO is, therefore, clearly contrary to the aforesaid provision contained in I.T. Act as well as it is contrary to basic principles of natural justice. The full bench of the Hon'ble Patna High Court in the case of Jagdish Prasad Choudhary had taken such a view after taking into consideration the various earlier judgments including the earlier judgment of Patna High Court in Laljidas Agarwalla's case relied upon by the learned D.R. The Hon'ble Full Bench of Patna High Court did not approve the view taken in the earlier judgment of the same High Court in M. Sreedharan's case. The penalty levied under section 18(1)(a) in that case which was cancelled by the Tribunal on the ground that no reasonable opportunity of being heard was given by the successor WTO before passing the order imposing penalties under section 18(1)(a) was approved. In that judgment the nature of penalty proceedings, applicability of the principles of natural justice were also considered extensively. The ratio of the Full Bench of the Patna High Court squarely supports the contention of the assessee in the present cases. The penalties levied in all these cases deserves to be cancelled, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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