9911796707
TMI Blog1996 (2) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty assessee levied Rs. ---------------------------------------------------------- 87-88 1611/A/91 Shri C.C. Patel 1,860 87-88 1612/A/91 Smt. S.V. Patel 3,470 88-89 1613/A/91 Smt. S.V. Patel 6,870 ---------------------------------------------------------- 3. The Dy. CIT(A) confirmed these penalties 4. The learned counsel for the assessee submitted that the penalty levied by the Assessing Officer is not valid. The nature of default was not indicated in the notice. The Officer who earlier gave a show-cause notice was transferred and no fresh show-cause notice was issued by the successor who imposed the penalty. It was pointed out by him that the notice dated 3-7-1989 (copy at pg. 10 of paper book) was issued by Shri P.C. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee at Rs. 36,019 and agricultural income of Rs. 6,576 aggregated in the said total income. The assessee submitted the said estimate on 9-6-1986. The accounting year of the year under consideration ended in October, 1986. A perusal of the statement of income for assessment year 1985-86 reveals that the assessee's share income from partnership M/s. J.B. Packaging was Rs. 3,135 only which in the year under consideration increased to Rs. 41,387. The assessee declared total income in the year under consideration at Rs. 1,17,854 excluding income from agriculture of Rs. 4,031. The difference between the income shown in the estimate and the income shown in the return of income is mainly on account of substantial increase in the share income of M/s. J.B. Packaging which could not have been foreseen by the assessee. He placed reliance on the decisions in CIT v. S.B. Electric Mart (P.) Ltd. [1981] 128 ITR 276/6 Taxman 270 (Cal.) and CIT v. Birla Cotton Spg. & Wvg. Mills Ltd. [1985] 155 ITR 448/22 Taxman 407 (Cal.) to support his contention that under such facts and circumstances, no penalty could be levied for alleged failure to file higher estimate of income. In the alternative, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitute a reasonable cause for delay in furnishing the return of the partner assessee. In the present case, the question related to furnishing of a higher estimate of income which suddenly increase due to substantially higher share income received by the firm which could be estimated only after the books of account of the firm were to be closed after the end of the accounting year in October, 1986. Moreover, the Hon'ble Gujarat High Court in that case had observed that the assessee did not furnish any evidence to show that the books of accounts of the firm were not ready or that the assessee's share income was not worked out in time. In the present case the penalty has been levied by the Assessing Officer without giving any show-cause notice. In response to the earlier notice, the assessee had asked for a copy of the earlier show cause notice, so that the assessee can submit appropriate reply to the said show cause notice. A copy of original show-cause notice was not supplied to the assessee in spite of a specific requirement. The learned counsel thus strongly urged that penalties in these cases should be cancelled. 7. The facts in the case of Smt. Sobhnaben V. Patel for assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee can make an effective exercise of his right demand an opportunity of rehearing in terms of the proviso to section 129. In the present case, the successor ITO who imposed the penalty did not inform the assessee of the aforesaid two facts. In the absence of which the question of making a demand by the assessee for rehearing or for of fresh opportunity could not arise. The penalty so levied by the successor ITO is, therefore, clearly contrary to the aforesaid provision contained in I.T. Act as well as it is contrary to basic principles of natural justice. The full bench of the Hon'ble Patna High Court in the case of Jagdish Prasad Choudhary had taken such a view after taking into consideration the various earlier judgments including the earlier judgment of Patna High Court in Laljidas Agarwalla's case relied upon by the learned D.R. The Hon'ble Full Bench of Patna High Court did not approve the view taken in the earlier judgment of the same High Court in M. Sreedharan's case. The penalty levied under section 18(1)(a) in that case which was cancelled by the Tribunal on the ground that no reasonable opportunity of being heard was given by the successor WTO before passing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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