COMMISSIONER OF INCOME TAX Vs. MANORANJAN MOHANTY

JUDGEMENT

(1.) THE Tribunal, Jabalpur Bench, Jabalpur, has referred the following questions to this Court for its opinion under S. 256(1) of the INCOME TAX ACT, 1961 (hereinafter referred to as " the Act ") :

(2.) THE facts in a nutshell, necessary for answering the aforesaid questions, may be stated as under: An order of assessment was passed against the assessee on August 12, 1969. Subsequently, on August 9, 1971, an order imposing penalty on the assessee was passed by the IAC. An appeal was preferred by the assessee against this order which was allowed by the Tribunal on November 18, 1972, and the matter was remanded to the IAC for being decided afresh. In pursuance of the order of remand, the IAC passed a fresh order on January 30, 1979, imposing penalty on the assessee. An appeal was again preferred against this order by the assessee before the Tribunal which was allowed on October. 16, 1980, and the order imposing penalty was quashed. The CIT thereupon made an application for referring question No. (i) stated above. This application was numbered as R. A. No. 43 (JAB) of 1980. A miscellaneous application was filed by the assessee before the Tribunal asserting that apart from the point on which the appeal had been allowed by the Tribunal, another plea bad been raised to the effect that the order of the IAC dated January 30, 1979, imposing penalty was bad in law inasmuch as it had been passed after an inordinate delay of more than six years of the passing of the order of remand dated November 18, 1972, but the same had not been considered by the Tribunal in its appellate order. This plea found favour with the Tribunal and holding that even though the point had been raised but had not been decided, the Tribunal decided this point also in favour of the assessee whereupon on another application, being R. A. No. 4 (JAB) of 1982 made on behalf of the CIT, the second question stated above was referred by the Tribunal. It may, however, be pointed out that while referring both these questions, the Tribunal has drawn up a common statement of case and referred these questions by the same order.

(3.) IN Vasani and Co. vs. CIT 1978 CTR (Guj) 60 : (1978) 112 ITR 819 (Guj), a question came up for consideration in regard to the scope of an order of penalty to be passed under S. 275 of the Act. It was held that on a plain reading of this provision, it was obvious that the term " no order imposing a penalty under Chapter XXI shall be passed " would refer prima facie to the initial order or the first order which would have to be passed by the competent authority and the two years' period was never intended to set up a limit for final completion of all proceedings.