1966 (6) TMI 2 - HC - Income Tax

Income-tax Officer initiated proceedings under sections 28(1)(c) and 28(3) for the imposition of a penalty for concealment - held that on a proper construction of s. 5(7C) and 28 the successor ITO was competent to levy penalty without giving the assessee a fresh opportunity of being heard

Summary

Issues:
1. Competence of the successor Income-tax Officer to levy penalty without affording the assessee a fresh opportunity to be heard.

Detailed Analysis:
The judgment pertains to an assessment year where the assessee initially declared an income of Rs. 14,143 but later revised it to Rs. 61,244. Subsequently, penalty proceedings were initiated by the Income-tax Officer under sections 28(1)(c) and 28(3) for concealment. The successor Income-tax Officer imposed a penalty of Rs. 30,000 without re-hearing the assessee, leading to an appeal by the assessee to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner set aside the penalty order due to lack of re-hearing. However, the Appellate Tribunal overturned this decision, remitting the appeal back for further consideration by the Appellate Assistant Commissioner.

In the reference under section 66(1) of the Income-tax Act, 1922, the main question was whether the successor Income-tax Officer had the authority to levy the penalty without granting the assessee a fresh opportunity to present their case. The court referred to a previous judgment where it was held that if the assessee submits a written explanation without requesting a further hearing, the successor Income-tax Officer can impose a penalty after considering the written representation. In this case, the assessee had submitted a written statement before the transferred Income-tax Officer, with no oral representation made during the penalty proceedings.

The Tribunal found no evidence of oral representation during the penalty proceedings, despite the assessee's claim based on a communication. The court concluded that the written representation by the assessee sufficed, and since no request for a re-hearing was made, there was no obligation for the successor Income-tax Officer to provide another opportunity for representation. Citing precedent, the court held that the successor Income-tax Officer was competent to levy the penalty without granting a fresh hearing to the assessee. Therefore, the court's answer to the question posed was in favor of the Income-tax Officer.

The judgment highlights the importance of procedural compliance in penalty proceedings under the Income-tax Act and emphasizes that written representations can be considered valid without the necessity of a fresh oral hearing if no such request is made by the assessee. The decision provides clarity on the competence of a successor Income-tax Officer in imposing penalties based on written submissions by the assessee without requiring additional oral representations unless specifically requested.