INCOME-TAX OFFICER Vs. P K LEELAVATHI

JUDGEMENT

(1.) These appeals by the Revenue are directed against the common order of the CIT (Appeals) holding that the orders of penalty were ab initio void and also barred by limitation.

(2.) The admitted facts are as follows. The assessment orders for the assessment years 1968-69, 1972-73, 1973-74 and 1974-75 were made on 20-4-1977. The assessment orders for the assessment years 1969-70, 1970-71 and 1971-72 we made on 26-10-1977. These orders were set aside by the Commissioner of Income-tax acting u/s. 263 by orders dated 18-4-1979 and 24-10-1979 respectively requiring the ITO to pass fresh orders of assessment. But no such fresh orders were passed by the ITO as the orders of the CIT were challenged on appeal. The Income-tax Appellate Tribunal by order dated 26-6-1981 set aside the orders made u/s. 263 on the ground that adequate opportunity of being heard was not given to the assessee and remitted the matter to the CIT for fresh disposal in accordance with law. THereafter, the CIT passed an order on 21-5-1984 dropping the proceedings taken u/s 263. In the meanwhile, the ITO passed an order on 10-8-1981 purporting to revive the assessment orders by giving effect to the order of the Tribunal and on 31-3-1984 passed orders imposing penalties u/s 271 (1) (c) and 273 in respect of all the assessment years.

(3.) The assessee appealed and contended that these orders imposing penalties were without jurisdiction and barred by limitation. The CIT (Appeals) by his order dated 31-8-1984 accepted these contentions on the ground that until the fresh disposal of the 263 proceedings there were no enforceable assessment orders or penalty notices based on such orders which could clothe the ITO with the jurisdiction to levy penalties. He was also of the view that the limitation prescribed was only 6 months u/s 275 (a) (ii) from the date of the order of the Tribunal and therefore the orders of penalty were barred by limitation.