TMI Blog1983 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had failed to prove the nature and source of those cash credits as also on account of addition of Rs. 10,183 to the gross profit returned. Prior to the completion of the assessment, the ITO had issued notice to the assessee as to why penalty be not levied against it under section 271(1)(c) of the Income-tax Act, 1961 ('the Act'). 3. After the cause was shown and the assessee was heard, the ITO, vide his order dated23-3-1979, was satisfied that the assessee had committed the offence under section 271(1)(c) and penalty was exigible against the assessee under that provision. The ITO then went on to levy a penalty of Rs. 2,454 by observing that "Minimum penalty and maximum penalty comes to Rs. 2,454 and Rs. 4,908. I, therefore, impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty order of the ITO dated23-3-1979as also his order under section 154 by observing as under : " Though original order under section 271(1)(c) was not challenged it is claimed that since order under section 154 modified the order under section 271(1)(c) appellant can take it to its ambit the original order under section 271(1)(c) also. Appellant has objected to both the above orders on the ground that the penalty order both in its original order and after section 154 are void ab initio. It is claimed that for assessment year 1975-76 the penalty under section 271(1)(c) was in relation to income concealed. The calculation of penalty as done by the Income-tax Officer on the basis of tax was wrong as such and further rectification al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by the ITO on 23-3-1979 having been not appealed against by the assessee had become final between the ITO and the assessee not only regarding his (ITO's) finding regarding the commission of the offence under section 271(1)(c) but also regarding the quantum of the penalty leviable subject to the right of the ITO to rectify the same under section 154. Since there was no application by the assessee regarding the existence of any mistake apparent on the record in the matter of the finding of the ITO in the original penalty order, dated 23-3-1979, regarding the commission of the offence by the assessee under section 271(1)(c) for the year under consideration, the finding of the ITO in this behalf became final. Insofar as the quantum of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al by the assessee before the AAC was not under section 246(o). Further the order of the ITO dated 23-3-1979 having become final regarding the commission of the offence under section 271(1)(c) and the assessee being liable to penalty under section 271(1)(c), the assessee having not appealed against that part of the order dated 23-3-1979 could not be the subject-matter of the appeal by the assessee before the AAC against the order of the ITO under section 154 dated 26-9-1980. The only point which could be agitated before the AAC in the appeal against the order of the ITO under section 154 dated 26-9-1980 would be regarding the quantum of the penalty levied which by virtue of the said order was enhanced from Rs. 2,454 to Rs. 14,810. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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