COMMISSIONER OF INCOME TAX Vs. BADRI BHOLARAM

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961, the Income-tax Appellate Tribunal, Indore Bench, has referred the following questions of law to this court for its opinion :

(2.) THE material facts giving rise to this reference briefly are as follows :

(3.) THE question, then, that arises for consideration is whether the Tribunal was right in not remanding the case to the ITO for proceeding under the provisions of the I.T. Act, 1961. Now, the Tribunal did not remand the case to the ITO because of the limitation prescribed by Section 275 of the Act. THE Tribunal, however, did not consider whether the ITO had jurisdiction to issue notice under Section 271(1)(c) of the Act in view of the provisions of Section 274(2) of the I.T. Act, 1961, as they stood on 22nd November, 1972. It was not disputed before us that under those provisions, the IAC and not the ITO had jurisdiction to issue a notice and impose penalty as the provisions of Section 274(2) of that Act were attracted, in the circumstances of the case. Thus, the ITO had no jurisdiction on 22nd November, 1972, to proceed to impose penalty on the assessee by issuing a show-cause notice and the penalty proceedings were vitiated altogether. This aspect of the matter was, however, not considered by the Tribunal while coming to the conclusion that the order of penalty passed by the ITO under the Indian I.T. Act, 1922, was vitiated altogether. But as held in CIT v. Indian Molasses Co. P. Ltd. [1970] 78 ITR 474 (SC), if a particular question of law is referred for the opinion of the High Court, the High Court can consider another aspect of the matter as regards the same question of law. THErefore, in our opinion, the order of penalty imposed by the ITO was vitiated altogether because he had no jurisdiction to impose penalty in the circumstances of the case by virtue of the applicability of the provisions of Section 274(2) of the Act of 1961 as they stood on the material date, to the facts of the case. In this view of the matter, it is not necessary for us to consider the question as to whether the bar of limitation prescribed by Section 275 of the Act of 1961 was or was not attracted. We, therefore, decline to answer the first question referred to us in view of our answer to the second question.