TMI Blog1988 (6) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... ness and residential premises on29th Nov., 1987. The assessee then moved a petition, purporting to be under s. 273A, to the CIT disclosing investments of Rs.3,19,125 made during asst. yrs. 1980-81 to 1982-83 and praying that the said amounts be apportioned equally in four years, i.e., asst. yrs. 1979-80, 1980-81, 1981-82 and 1982-83. The assessee further prayed that no penalties be levied on him. The amount of income was increased to Rs. 5,60,000 in the course of the proceedings before the CIT, who directed that the gross income of Rs. 5,60,000 and net assessable income after adjustment of depreciation be assessed as below: Asstt. Year Gross Income Net assessable income 1979-80 1,40,000 1,38,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, therefore, ITO's satisfaction with regard to penalty as well as IAC's approval was very much present. The learned AAC, however, found that specific approval in terms of the proviso aforesaid had not been obtained. The learned AAC, therefore, confirmed the penalty. 5. At the hearing before us, the learned counsel for the assessee first urged that the levy of the penalty was invalid because of non-compliance with the proviso to s. 271(1)(c). The said proviso reads as under: "Provided that, if in a case falling under cl. (c), the amount of income (as determined by the ITO on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished exceeds a sum of Rs. 25,000, the ITO shall not is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations of the AAC and submitted that during the settlement proceedings the IAC must have approved the levy of a minimum penalty. 6. We have considered the respective arguments. A copy of the assessee's application dt.1st March, 1982purporting to be under s. 273A of the IT Act, 1961 has been placed at pages 1 2 of the paper book. A perusal of this application would show that it was, in fact, an application for settlement. The assessee offered a certain amount (initially Rs. 3,19,125) to be assessed after equal apportionment for four years and also at the same time requesting that no penalties be levied. The Commissioner passed an order dt.11th Dec., 1982and he does not purport to exercise his powers of waving or reducing the penalty in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee did not dispute that order passed by the Commissioner directing the levy of minimum penalty was merely administrative and though binding, the ITO was bound to follow the procedure prescribed by law. We find force in this argument. The learned Departmental Representative did not point out any authority in support of the submission that while complying with an order under s. 119, the ITO need not go into the procedure prescribed by law. The Commissioner's order under s. 119, did not specify any particular amount of penalty to be levied. It merely said that the minimum amount of penalty imposable be levied. This direction did not obviate the necessity of issuing notices to the assessee to show cause in terms of s. 274 and the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the AAC's observation that in the settlement proceedings, a report from the IAC must have been obtained and, therefore, the previous approval of the IAC was very much present, we are of the view that these observations are based on presumptions which are not authorised by law. The learned Departmental Representative has not placed any material before us to show that the IAC concerned ever approved the levy of the penalty in question. Further, even if the IAC was associated with the processing of the assessee's settlement petition and the CIT passed the order aforesaid on the recommendation of the IAC, even then a fresh reference to the IAC was necessary in terms of the aforesaid proviso. As already discussed, the assessee had a right to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less the assessee was informed of the particular items of addition on the basis of which levy of penalty was proposed. It is while dealing with the question that the Hon'ble High Court has observed "It was not only necessary to inform the assessee of the particular concealment but also necessary for the Department to prove positively that there was such a concealment". The report does not disclose the assessment year to which the case pertained. So far as the present case is concerned, the assessee has earlier filed return declaring income of Rs. 26,160 and had later on moved a petition for settlement conceding that he had a much larger income and agreeding to be assessed thereon. Therefore, the proof of concealment was contained in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
