KASHIRAM TEA INDUSTRIES LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) Alleging infraction of various provisions of the I.T. Act, 1961, the ITO, Central Circle XXIV, Calcutta, served three sets of notices upon the petitioner in respect of the assessment years 1969-70 and 1973-74. Challenging the competence and jurisdiction of the concerned officer to issue such notices the petitioner moved this court by filing the instant writ application.

(2.) To appreciate the contentions raised by the petitioner in the application, it will be necessary to detail the nature and contents of the notices. The first set of notices dated November 29, 1975, copies of which have been annexed to the application (annex. " C ") is based on the premises that in the course of proceedings for the above two assessment years it appeared to the ITO that the petitioner concealed the particulars of its income or furnished inaccurate particulars and the petitioner was directed to appear before him (the ITO) and show cause why an order imposing a penalty should not be made under Section 271 of the I.T. Act. On the selfsame allegations the other notice intimated the petitioner that the case for a levy of penalty under Section 271(1)(c) was being referred to the IAC and that further proceeding in regard to the levy of penalty would take place before the IAC as provided for in Section 274(2) of the I.T. Act. The second set of notices (annex. " D ") directed the petitioner to appear before the ITO and to show cause why an order imposing a penalty should not be made under Section 273 of the I.T. Act, 1961, for its failure, without reasonable cause, to furnish an estimate of advance tax payable in accordance with the provisions of Section 212(3) in respect of the two assessment years. By the last set of notice (annex. " E "), the petitioner was informed of the initiation of proceedings under Section 274 read with Section 271 of the I.T. Act for its failure to furnish the returns of income within the time allowed and in the manner required by Section 139(1) of the Act, without reasonable cause, for the above two assessment years.

(3.) In assailing the first set of notices (annex, " C "), Mr. Haldar contended that for concealment of income or for furnishing inaccurate particulars of such income, a proceeding for imposing penalty can be initiated by the ITO under Section 271 of the I.T. Act and if the offending income was more than Rs. 25,000 such a proceeding could be initiated by the IAC ; but two simultaneous penalty proceedings before the ITO as also before the IAC were unknown to law. According to Mr. Haldar the initiation of two simultaneous proceedings unmistakably showed the non-application of mind by the ITO. As such, Mr. Haldar argued, both the notices are liable to be cancelled. Mr. Sengupta, the learned advocate appearing for the revenue, submitted that for the two assessment years in question the ITO in the course of the proceedings found that the petitioner had an income of more than Rs. 25,000 from undisclosed sources and as such he was entitled to initiate a penalty proceeding under Section 271 and to refer the case to the IAC for the imposition of penalty, in accordance with Section 274(2) of the Act. To substantiate his contention Mr. Sengupta produced before me the relevant assessment order for the assessment year 1969-70.