TMI Blog1976 (6) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... o years 1966-67 and 1967-68, notices had been issued under section 274 read with section 271, on March 30, 1970, requiring the assessee to show cause why an order imposing penalties on him should not be made under section 271 of the Act. These notices were issued because the return that was due to be filed on June 30, 1966, for the year 1966-67, was filed only on March 21, 1970, and the return due for the year 1967-68 on June 30, 1967, was filed only on January 22, 1969. It appears that the assessee filed his representations pointing out why penalties should not be imposed, on March 20, 1971. Without considering this representation the Income-tax Officer imposed a penalty limited to 50 per cent. of the net tax payable for the year 1966-67, and a penalty of Rs. 5,364 for the year 1967-68. Appeals were taken by the assessee before the Appellate Assistant Commissioner and the Appellate Assistant Commissioner apparently after considering the representation of the assessee, though he does not refer to it in terms, but accepting the facts stated therein that the assessee was prevented by reasonable cause from filing the return within the time stipulated, cancelled the orders imposing pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope from the statutory provisions where such provisions exist. If there has been an infringement of fundamental rights guaranteed by the Constitution by an order which violated a statutory provision which had provided for compliance with the principles of natural justice the order would be void and such order would be incapable of being resurrected by an order passed in appeal from that void order. The question before us is whether the same principle can apply to a right which is less than a fundamental right and whether the violation of the principles of natural justice even if it is provided by a statute by the first authority who passed the order, would make that order void in that it is incapable of being resurrected or validated by an appellate order. We shall examine that question in the light of the decided cases that have been placed before us. Before proceeding to do so we shall deal with another question which has been mooted at the bar on behalf of the assessee that, reading section 271(1), it is clear that what the law contemplates is a subjective satisfaction of the Income-tax Officer. It was urged that if it was not a subjective satisfaction there was at least a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tating that the position may be different where there has been no infringement of the fundamental right. This is the passage: "Where hearing is obligated by a statute which affects the fundamental right of a citizen, the duty to give the hearing sounds in constitutional requirement and failure to comply with such a duty is fatal. May be that in ordinary legislation or at common law a Tribunal having jurisdiction and failing to hear the parties, may commit an illegality which may render the proceedings voidable when a direct attack is made thereon by way of appeal, revision or review, but nullity is the consequence of unconstitutionality and so without going into the larger issue and its plural divisions, we may roundly conclude that the order of an administrative authority charged with the duty of complying with natural justice in the exercise of power before restricting the fundamental right of a citizen is void and ab initio of no legal efficacy." The above passage clearly indicates the distinction between the two types of orders. It was contended before the Federal Court in Suraj Narain Anand v. North-West Frontier Province, AIR 1942 FC 3, that the order of the Deputy I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry strenuously contended on the basis of the above passage that the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal stood in no better position than the Inspector-General of Police in the case that was considered by the Federal Court. We find it difficult to accept this contention. The appellate power conferred on the Appellate Assistant Commissioner seems to be unlimited. Section 250 does not specifically state the powers of the appellate authority. But we conceive that the appellate authority has the power to set aside the order and remit the case back to the Income-tax Officer or allow the appeal on the merits or pass an order calling for fresh findings from the first authority and thereafter deal with the appeal in one of the above manners or alter or amend or modify the order under appeal. In other words, the power conferred on the appellate authority by section 246 and which is exercised in accordance with the procedure in section 250 indicates an amplitude and width which is no less wide than that of the Income-tax Officer. He does not merely satisfy himself as to whether the Income-tax Officer acted properly. He considers the question as enjoined by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase where he proceeded ignoring the material that was available, a procedure which resulted in injustice. We do not think that the fact that the mind had not been applied can be said to be sufficient to call the order passed by the Income-tax Officer a void order which could not be dealt with by the appellate authority. Counsel on behalf of the revenue invited our attention to section 275 of the Act and contended that we must spell out a right in the appellate authority to deal with the matter itself in view of the time limit provided by the section. We would wish to express no opinion on this aspect. If the Income-tax Officer dealt with the matter after the period provided by section 275 the order passed by the Income-tax Officer may be illegal. On the question whether the appellate authority could itself take evidence in order to avoid a remand and thus circumvent section 275, we would like to express no opinion in these cases. In the light of the above we see no infirmity in the order passed by the Tribunal notwithstanding the fact that the Income-tax Officer was unaware of the representation made by the assessee and did not consider that representation. We, accordingly, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (ii) any period during which the immunity granted under section 245H remained in force; and (iii) any period during which a proceeding under this Chapter for the levy of penalty is stayed by an order or injunction of any court, shall be excluded. 250. (1) The Appellate Assistant Commissioner shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the Income-tax Officer against whose order the appeal is preferred. (2) The following shall have the right to be heard at the hearing of the appeal-- (a) the appellant, either in person or by an authorised representative; (b) The Income-tax Officer, either in person or by a representative. (3) The Appellate Assistant Commissioner shall have the power to adjourn the hearing of the appeal from time to time. (4) The Appellate Assistant Commissioner may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Income-tax Officer to make further inquiry and report the result of the same to the Appellate Assistant Commissioner. (5) The Appellate Assistant Commissioner may, at the hearing of an appeal, allow the appellant t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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