COMMISSIONER OF INCOME-TAX Vs. CHHEDI LAL

JUDGEMENT

(1.) In pursuance of notice under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the assessee, Chhedi Lal, filed his return. The Income-tax Officer was of opinion that the assessee had not disclosed certain income. The difference being in excess of 20%, the Inspecting Assistant Commissioner imposed penalty upon the assessee by order dated January 4, 1977. The assessee preferred an appeal against this order under Section 253 of the Act. On November 30,1978, the Income-tax Appellate Tribunal set aside the order dated January 4, 1977, being of the view that the power of the Inspecting Assistant Commissioner to impose penalty had ceased with effect from April 1, 1976, on account of the amendment of Section 274 of the Act The Commissioner of Income-tax applied to the Tribunal whereupon the Tribunal made a reference to this court under Section 256 on the question whether the Tribunal was correct in law in holding that the Inspecting Assistant Commissioner had no jurisdiction to pass the order of penalty after April 1, 1976. The reference was answered by this court on July 31, 1980, in the affirmative. On October 27, 1980, the Commissioner of Income-tax filed a petition under Section 261 of the Act for certificate for leave to appeal to the Supreme Court.

(2.) The assessee, Chhedi Lal, it appears, died on March 11, 1977. The notice sent to him in connection with the leave petition was returned unserved. On November 23, 1981, the Commissioner of Income-tax applied for substitution of the widow and the son of the deceased as his legal representatives accompanied with an application under Section 5 of the Limitation Act, 1963, for the condonation of delay alleging that prior to August 12, 1981, when the notice was returned unserved, the Department was unaware of the factum of death. Smt. Chhedana, the widow of the deceased assessee, put in a counter-affidavit dated November 28, 1983, wherein she asserted that on February 15,1971, her husband had executed a registered will in her favour and also that on September 20, 1978, she had put in an application before the Income-tax Appellate Tribunal intimating the death of the assessee who was the appellant and hence it is not correct for the Department to assert that they were not aware of the death.

(3.) The applications made by the petitioner for substitution and condonation of delay were disposed of by us on April 26, 1984. Counsel for Smt. Chhedana, the opposite party, could not be present on that occasion. On May 1, 1984, he applied for setting aside the ex parte order. Cause being sufficient, we recalled the order dated April 26, 1984, and have heard the learned counsel for the parties on merits.