TMI Blog1972 (1) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... le of katechu. During the assessment proceedings for the assessment year 1963-64 (the relevant previous year being the year commencing July 1, 1961, and ending June 30, 1962), the Income-tax Officer discovered that the assessee had not disclosed its true income and after considering the explanation of the assessee he added Rs. 66,457 to the total income returned by the assessee. The assessment order was passed on January 21, 1964. At the end of the assessment order the Income-tax Officer recorded that action under section 271(1)(c) would taken separately. The assessee preferred an appeal to the Appellate Assistant Commissioner, but shortly thereafter, it made an application for permission to withdraw the appeal. Permission was denied by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal , allowed the appeal in so far as it reduced the penalty to Rs. 10,000 confining it to the concealed income discovered by the Income-tax Officer. The Tribunal took the view that the Inspecting Assistant Commissioner had no jurisdiction to impose a penalty in, respect of the concealed income discovered by the Appellate Assistant Commissioner. The Commissioner of Income-tax as well as the assessee applied for a reference to this court, and accordingly the Tribunal has referred the following three questions, the first two being referred at the instance of the Commissioner of Income-tax and the third at the instance of the assessee : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er proceedings in regard to the levy of a penalty will take place before the said Inspecting Assistant Commissioner of Income-tax as provided in sub-section (2) of section 274." It is apparent that the concealment of income was discovered by the Income-tax Officer in the assessment proceeding. When he referred the case for imposing a penalty to the Inspecting Assistant Commissioner on February 18, 1964, it was the penalty case arising with reference, to what was discovered in that assessment proceeding. At that time, the Appellate Assistant Commissioner had not yet made any order disposing of, the appeal against the assessment order. Consequently, when the Inspecting Assistant Commissioner proceeded to exercise his powers under section 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nything contained in clause (iii) of sub-section (1) of section 271, if in a case falling under clause (c) of that sub-section, the minimum penalty imposable exceeds a sum of rupees one thousand, the Income-tax Officer shall refer the case to the Inspecting Assistant Commissioner who shall, for the purpose, have all the powers conferred under this Chapter for the imposition of penalty. (3) An Appellate Assistant Commissioner on making an order under this Chapter imposing a penalty, shall forthwith send a copy of the same to the Income-tax Officer." Section 271(1) confers power upon the Income-tax Officer as well as upon the Appellate Assistant Commissioner to take penalty proceedings. If the Income-tax Officer in the course of any proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been generally recognised as officers of more or less equivalent status. The Inspecting Assistant Commissioner does not have jurisdiction over the Appellate Assistant Commissioner. The Income-tax Officer is subordinate to the Inspecting Assistant Commissioner, and, therefore, section 274(2) contemplates the transfer of a penalty case beyond his pecuniary jurisdiction to the Inspecting Assistant Commissioner. No such situation is contemplated in a penalty proceeding commenced by the Appellate Assistant Commissioner. Besides, to recognise in the Inspecting Assistant Commissioner the power to impose a penalty in respect of concealed income discovered by the Appellate Assistant Commissioner (sic) of jurisdiction. On the one hand, as in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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