TMI Blog2015 (12) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. Here, though notice is dated 25.1.1965, admittedly, it is served on assessee in September 1965 i.e. in financial year 1965-66 which expired on 31.3.1966. The assessment year for the purposes of Section 153 (2) (a) in present facts , therefore, shall be 196566 only and the order has been passed on 18.3.1970 i.e. before 31.3.1970. It is, therefore, within the stipulated time limit of four years. As such, it cannot be said that it is barred by limitation. - Decided in favour of the Department. Penalty under Section 271(1)(c) - Held that:- The order imposing penalty cannot be passed if the appeal against basic order of assessment is pending before the Competent superior Authority. Here, on 24.2.1972 though 1st Appellate Authority had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee, the order of the Inspecting Assistant Commissioner imposing the penalty on the assessee was illegal and without jurisdiction ? 2. We have heard Official Liquidator as the assessee is already ordered to be wound up. Official Liquidator has taken assistance of panel Chartered Accountant M/s A. G. Pimperkhede Company. We have heard Mr A. G. Pimperkhede, Chartered Accountant and perused brief note submitted by him along with photo copies of precedents. 3. Mr Anand Parchure, learned counsel for respondent submits that basic facts leading to the Reference are not in dispute. The Central Excise Authorities had carried out searches at various premises including the premises of the assessee Company and its directors and sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt gives rise to an ambiguity. He, therefore, states that altogether different complexion is now sought to be placed on question no. 2, as referred By pointing out various precedents which deal with technical aspects like recording a satisfaction on concealment etc. He urges that in present matter, ITAT has correctly found that if argument of assessee is accepted, it would lead to absurdity. He also by way of abundent precaution invites attention to the provisions of Section 275 (1) (a) of the Income Tax Act to point out that order imposing penalty passed on 24.2.1972 is within one year of adjudication of appeal by CIT. The appeal was adjudicated on 2.3.1971 and as such, the order is within limitation. 5. Learned Chartered Accountant and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions contained in section 149 or section 150, be issued with respect to that assessment year and all the provisions of the 1961 Act shall apply accordingly. Issuance of such notice has been made subject to the provisions of Section 149 or Section 150 of 1961 Act. 8. Provisions of Section 149 of the Income Tax Act, 1961 prescribe a limitation of six years at the relevant time. Accordingly, it is not in dispute that the issuance of notice dated 12.1.1965 is within six years of assessment year 1959-60. But the question referred to is about the order of reassessment dated 18.3.1970. We find that the provisions of Section 153 ( 2) at the relevant time prescribed limitation of four years from the end of assessment year in which notice un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that appeal on 2nd March 1971. The order of penalty has been passed on 24.2.1972. However, against this adjudication by 1st Appellate Authority, assessee had filed further appeal and that appeal before the ITAT was pending till 26.3.1974. These facts are not in dispute. 10. To point out the effect of adjudication of penalty under Section 271 (1) (c) before adjudication by ITAT, the assessee invited our attention to the fact that addition of ₹ 10 lacs in assessment year 195960 by assessing officer was upheld by 1st Appellate Authority in its order dated 2.3.1971. This addition was also a foundation for penalty proceedings and assessee pleaded that it is not a concealed income before the Authority in penalty proceedings. Though the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority on 2.3.1971 and was only partly set aside by ITAT on 26.3.1974, contention that penalty order does not specifically record any finding about concealment, is misconceived. 13. The language of Section 275 (1) (a) noted supra clearly shows that the order imposing penalty cannot be passed if the appeal against basic order of assessment is pending before the Competent superior Authority. Here, on 24.2.1972 though 1st Appellate Authority had disposed of the appeal, further appeal of assessee before the ITAT was very much pending. The order imposing penalty, therefore, appears to be premature and, therefore, illegal and without jurisdiction. The notices for initiation of those proceedings are, dated 12.1.1972, 3.2.1972 and 27.9.1972 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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