COMMISSIONER OF INCOME TAX Vs. RAMESHWARDAS RAM NARAIN

JUDGEMENT

(1.) FOR the assessment year 1951-52 the Income-tax Officer, D-Ward, Meerut, by his order dated May 1, 1964, imposed upon the assessee a penalty of Rs. 15,000 under Section 28(1)(c) of the Indian Income-tax Act, 1922. The order stated that the previous approval of the Inspecting Assistant Commissioner for imposing the penalty had been obtained, but on appeal before the Appellate Assistant Commissioner it was established that the Income-tax Officer sent his letter to the Inspecting Assistant Commissioner seeking his approval after the order of penalty was passed. It was held that the order imposing penalty on the assessee was without jurisdiction because it was, in fact, passed without the requisite approval. At the end of the order of the Appellate Assistant Commissioner it was further observed that "the Income-tax Officer should take such action according to law as he deems necessary in this case ".

(2.) THE assessee felt aggrieved at this direction and filed an appeal before the Income-tax Appellate Tribunal. THE Tribunal held that under Section 31(3)(f) of the Indian Income-tax Act, 1922, the Appellate Assistant Commissioner had power in the case of an order under Section 28 to either confirm or cancel or vary it so as either to enhance or reduce the penalty. This provision was interpreted as not conferring upon the Appellate Assistant Commissioner any jurisdiction to make the direction of the kind that he made in the appellate order. On this view, the last sentence mentioned above was cancelled, and to this extent the assessee's appeal was allowed.

(3.) FOR this reason also the Tribunal was justified in setting aside the direction.