DAS P AND CO Vs. DEPUTY CIT

JUDGEMENT

(1.) THE petitioner is a registered partnership-firm and is a regular assessee under the Income-tax Act, 1961. In the instant case, by an order dated March 31, 1989, the Deputy Commissioner of Income-tax, Guwahati, levied a sum of Rs. 28,351 as penalty under Section 271(1)(c) of the Income-tax Act, 1961, for furnishing inaccurate particulars of income. As against the said order of penalty, the petitioner went in appeal before the Commissioner of Income-tax (Appeals), Guwahati. THE said Commissioner heard the appeal and confirmed the imposition of penalty, vide its order dated December 21, 1989, holding that : "I am of the opinion that the penalty has correctly been levied by the Deputy Commissioner of Income-tax (Assessment), Special Range, in view of Explanations 1(A) and (B) to Section 271(1)(c) and thus I confirm the imposition of penalty and dismiss the appeal of the appellant". Subsequent to the passing of the said order by the appellate authority, the Deputy Commissioner of Income-tax (Assessment), Range-1, purportedly exercising the powers under Section 154 of the Act rectified the order of penalty dated March 31, 1989, holding that there was mistake apparent from the record. THE assessing authority imposed a further sum of Rs. 36,618 treating the petitioner as an unregistered firm under Section 271(2) of the Act. THE petitioner has challenged the said rectification order by the writ application filed before this court on the ground that the respondents have no authority or jurisdiction to rectify the order under Section 154 since the order imposing penalty was appealed against and the appellate authority had considered and decided the issue of penalty. According to the petitioner, after the passing of the aforesaid order on the question of imposition of penalty, the Income-tax Officer sought to rectify the order of penalty relating to the same matter, i.e., imposition of penalty under Section 271(2) of the Act. Dr. Saraf, appearing for the petitioner, submits that such an attempt by the Income-tax Officer is not permissible under the provision of Section 154 of the Act. If, in a matter in appeal or revision, the authority passing the said order has considered and decided a particular matter, the assessing authority can no longer pass an order by way of rectification under Section 154 of the Act. Section 154(1) and (1A) of the Act reads as follows :

(2.) ON the basis of the aforesaid provisions, Dr. Saraf submits that the matter of penalty under Section 271(1)(c) was fully considered and decided by the appellate authority, vide its order dated December 21, 1989, and the appeal filed by the petitioner was dismissed, holding that the penalty was correctly imposed. In that view of the matter, the rectification order passed by the Income-tax Officer subsequently on October 31, 1990, was without jurisdiction and illegal. In support of his contention, Dr. Saraf referred to the decision of the Madras High Court in CIT v. Indian Auto Stores, 1981 129 ITR 554 where a similar question arose before the Madras High Court. According to Dr. Saraf, the present case falls squarely within the parameters of the Madras judgment wherein also an assessment was made and the penalty imposed under Section 271(1)(c) which was appealed against and the appeal was dismissed. Subsequently, the assessing authority wanted to rectify the quantum of penalty of Rs. 706 to Rs. 8,588 treating the firm as an unregistered firm under Section 271(2). The Madras High Court, after consideration of several other judgments, held as follows (at page 558) :