COMMISSIONER OF INCOME TAX Vs. EMINENT ENTERPRISES

JUDGEMENT

(1.) As directed by this court and at the instance of the Revenue the Income Tax Appellate Tribunal (in short, the Tribunal) has referred the following two questions of law for the decision of this Court:

(2.) The respondent is an assessee to income tax. For the year 1976-77 the Income Tax Officer, by order dated 18-3-1981 1evied a penalty of Rs.39,480/- on the respondent assessee under S.271(1)(a) of the Income Tax Act. In the appeal, the Appellate Assistant Commissioner of Income Tax, by order dated 30-12-1983, set aside the order of penalty with a direction to the Income Tax Officer to pass a fresh order, after giving an opportunity to the assessee of being heard. In second appeal, at the instance of the assessee, the Tribunal set aside the order of the Appellate Assistant Commissioner and deleted the penalty levied by the Income Tax Officer. The appeal filed by the assessee was allowed by order dated 23-7-1986. It is thereafter, the Revenue moved the Tribunal to refer certain questions of law for the decision of this Court. It was declined. The Revenue moved this Court and this Court re-formulated or recast the questions as specified hereinabove and directed the Tribunal to refer the same to the court.

(3.) The order, levying the penalty under S.271(1)(a) was set aside by the Appellate Assistant Commissioner with a direction to the Income Tax Officer to pass a fresh order after affording an opportunity to the assessee of being heard. This order was cancelled by the Tribunal. The Tribunal has given more reasons than one. One of the reasons given by the Tribunal is that while exercising the powers under S.251(1)(b) of the Act the first appellate authority has no power to cancel the order appealed against and order a remit with directions. For the purpose of this case we are not embarking upon an adjudication as to whether, after the remit, if an order is passed, it will be within the time allowed by law. We need not adjudicate that larger question in this case. It will be sufficient if we advert to the jurisdiction of the Appellate Assistant Commissioner exercising powers under S.251(1)(b) of the Act and examine whether in an appeal against an order imposing penalty he can set aside the order appealed against and order a remit with directions.