COMMISSIONER OF INCOME TAX vs SMT. PREM LATA BAJPAI

Arijit Pasayat, C. J.

Heard.

At the instance of revenue, u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as ''the Act'') the Income Tax Appellate Tribunal, Delhi Bench-B (hereinafter referred to as the ''Tribunal'') has referred following question for opinion of this court :

"Whether, on the facts and in the circumstances of the case the Tribunal was correct in deleting the penalty of Rs. 10,000 levied by the IAC u/s 271(1)(c)?"

Factual position in a nutshell is as follows : For the assessment year 1973-74, assessed filed its return of income on 16-8-1973, disclosing income of Rs. 19,887. By a revised return, filed on 29-9-1976, it was shown at Rs. 47,834 which included Rs. 10,000 on account of shares allotted otherwise than for cash in Doburg Lager Breweries (P) Ltd. The assessing officer treated the sum of Rs. 10,000 as income from undisclosed sources and initiated penalty proceedings. The Inspecting Assessing Commissioner (hereinafter referred to as the ''Inspecting Assistant Commissioner'') levied penalty of Rs. 10,000 u/s 271(1)(c) of the Act by order, dated 29-8-1978. Same was challenged before Tribunal by assessee. Tribunal held that the Inspecting Assistant Commissioner had no jurisdiction to impose the penalty, by its order, dated 28-1-1981. No decision was rendered on other grounds. Subsequently, an application was filed by the assessee, which was treated as miscellaneous petition, with the request for taking up the case on merits also. By order, dated 27-2-1982, the Tribunal disposed of that application and decided the other grounds in favor of the assessee.

In view of the factual position highlighted above and decision of the Apex Court in Commissioner of Income Tax, Orissa Vs. Dhadi Sahu, ) the Tribunal was right in holding that the Inspecting Assistant Commissioner did not have jurisdiction to impose penalty. That being the position there is no necessity for deciding the question as to whether on merits also the assessed was entitled to any relief. The question is accordingly answered in the affirmative i.e., in favor of the assessed and against the revenue.