SYED MOHAMMED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE Income-tax References arise from a common order passed by the Incometax Appellate Tribunal, Cochin Bench, dated 30th May, 1983, in R. A. No. 314 (Coch) 80 at the instance of the assessee and R. A. No. 324 (Coch)80 at the instance of the Revenue. Both the applications are from the order in i. T. A. No. 150 (Coch) 78-79 relating to the assessment year 1973-74.

(2.) THE questions referred to this court at the instance of the assessee are as follows: (1) Whether on the facts and circumstances of the case the Tribunal is right in holding that penalty is exigible u/s. 271 (1) (c) of the incometax Act for the assessment year 1973-74? (2) Whether there was a valid reference by the I. T. O. u/s. 274 (2) to the Inspecting Asstt. Commissioner? THE questions referred to at the instance of the Revenue are as follows: (1) Whether, on the facts and in the circumstances of the case, and also on an interpretation of S. 271 (1) (c) of the I. T. Act, the tribunal is right in law and fact in holding that "he had concealed the particulars in respect of only that income which he should have disclosed in the return, namely, the capital gains arising from the transaction computed in accordance with the provisions of S. 80-T and Sec. 487? (2) Whether, on the facts and in the circumstances of the case, for the purpose of determining the quantum of concealment should not the tribunal in law first set off the capital loss of Rs. 8,355/- relating to the assessment year 1972-73 against the capital gains for the assessment year 1973-74? (3) Whether, on the facts and in the circumstances of the case, does the Inspecting Asstt. Commissioner have jurisdiction to impose penalty?

(3.) WHEN the reference cases came up for consideration before the Division Bench on 6-7-1993, T. L. Viswanatha Iyer on behalf of the division Bench ordered thus: "these references are at the instance of the assessee and the Revenue and concern the imposition of penalty on the deceased assessee under S. 271 (1) (c) of the Income Tax Act, 1961 for the assessment year 1973-74. While the assessee contended that he had not concealed particulars of any income, it was the case of the Department that the case squarely fell within s. 271 (1) (c ). The penalty had been imposed by the Inspecting Assistant commissioner purporting to act under S. 274 (2) of the Act, which had been repealed with effect from 1-4-1976. The assessee had raised a contention that the Inspecting Assistant Commissioner derives jurisdiction to impose penalty only if there is a valid reference to him by the Incometax Officer under s. 274 (2 ). The assessment was completed on 30-3-1976 and the Incometax Officer informed the assessee by a letter of even date that the case was being referred to the Inspecting Assistant Commissioner for the purpose of levy of penalty. The original of that letter was despatched to the Inspecting Assistant commissioner on 31-3-1976 and was admittedly received by the Inspecting assistant Commissioner on 1-4-1976. According to the assessee this letter contained only a proposal to initiate penalty proceedings and did not actually make any reference of any question of penalty to the Inspecting Assistant commissioner. The assessee therefore contended that there was no valid reference to the Inspecting Assistant Commissioner. It was this contention that resulted in the question mentioned earlier being referred to this court at the instance of the assessee. '