TMI Blog1974 (2) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 1965, passed an order imposing a penalty of Rs. 3,000. He observed that the maximum penalty imposable in this case worked out to 'Rs. 3,630 and so the imposition of Rs. 3,000 as penalty was reasonable. The assessee took this order in appeal to the Tribunal. Before the Tribunal it was argued that on the finding, that the maximum penalty imposable was Rs. 3,630 which, in other words, meant that this amount was on and a half times of the amount of tax which would have been avoided if the income ts returned by the assessee had been accepted as the correct income, the minimum penalty, which should be 20 per cent. of the avoided tax, would work out to Rs. 484, that is, below Rs. 1,000. The Tribunal held that, on the facts as given by the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh penalty order. Aggrieved, the assessee went up in appeal to the Tribunal. It was urged before the Tribunal that the order passed by the Inspecting Assistant Commissioner was barred by limitation of two years provided in section 275 of the Income-tax Act, 1961. To this contention the, departmental representative's reply was that, as held by the Supreme Court in Bhopal Sugar Industires Ltd. v. Income-tax Officer, Bhopal, the Inspecting Assistant Commissioner was duty bound to carry out the directions of a superior appellate authority, namely, the Tribunal. The Tribunal upheld this plea of the department and held that the Inspecting Assistant Commissioner was bound to pass an order as directed by the Tribunal. The Tribunal then addresse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal's order dated March 13, 1967, under section 254 and on that ground in cancelling the penalty imposed by the Inspecting Assistant Commissioner under section 271(1)(c) read with section 274(2) of the Act?" The principal aspect raised by the question referred to us is whether the period of limitation prescribed by section 275 was applicable to the proceedings conducted by the Inspecting Assistant Commissioner as a result of the Tribunal's order dated 13th March, 1967. In this view both the findings of the Tribunal, namely, the one on the question whether the Inspecting Assistant Commissioner could validly pass a fresh order of penalty irrespective of the period of limitation prescribed for it if the Tribunal had made a direction t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner free to make a fresh order if he could make a valid order in law, was correct, it is, in our opinion, unnecessary to express a concluded opinion on the other question, whether the Inspecting Assistant Commissioner would have been bound to obey the direction of the Tribunal to pass a fresh order of penalty irrespective of the fact that by lapse of time he lost jurisdiction to make such an order. This other question has, in the circumstances, become merely of academic value. We, therefore, answer the question referred to us in the affirmative, in favour of the assessee and against the department. The assessee will be entitled to costs, which are assessed at Rs. 200. The fee of the learned counsel is also assessed at the same figure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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