TMI Blog1982 (4) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... icer records, in the course of the assessment order, that notice for penalty proceedings should be issued to the assessee and all further action thereafter is taken by the Inspecting Assistant Commissioner ? " The assessee earned in the previous year, relevant to the assessment year 1961-62, interest of Rs. 4,757 from the money deposited with one Gwalior Investment Co. Pvt. Ltd. In the return for the said assessment year, which was filed on 17th March, 1962, this income was not disclosed and even in the revised return filed on 2nd November, 1965, it was not disclosed. The assessee merely disclosed the amount deposited by him with the aforesaid company in his wealth-tax return for the assessment year 1961-62. As far as income-tax proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no mention of the same, although at the hearing a note was made by the ITO that the representative of the assessee requested that the said item of interest might be included in the income. He held that this was clear omission, but in view of the fact that the assessee had disclosed that item at the stage of hearing, the penalty should be confined to the minimum provided under the said Act. The assessee preferred an appeal to the Income-tax Appellate Tribunal against this decision of the IAC. It was contended on behalf of the assessee before the Tribunal that the IAC had no jurisdiction to levy the penalty and that the quantum of the penalty was excessive. The Tribunal rejected both these contentions. The Tribunal went on to consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twithstanding anything 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 Rs. 1,000, 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." Mr. Naik, learned counsel for the assessee, made only two submissions. His first submission is that as the ITO proposed to levy a penalty, he should not have finalised the assessment at all but referred the matter to the IAC for the consideration of the levy of penalty and finalised the assessment after the decision regarding the levy of penalty had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted before the ITO. It has also been held in that case that the power to impose penalty depends upon the satisfaction of the ITO in the course of proceedings under the said Act and the ITO had recorded a finding in the very order of assessment that there had been a concealment of income and had also directed the issuance of a notice. This satisfaction was clearly established. The issuance of the notice was not prohibited to find out whether there was a case for the imposition of penalty and where it was found that the penalty liable to be imposed would be in excess of Rs. 1,000, the requirement that the matter should be referred to the IAC did not restrict the jurisdiction of the ITO to issue a notice. Needless to say, we are bound by this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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