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Commissioner of Income-tax Vs. Rameshwardas Ram Narain - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 69 of 1969
Judge
Reported in[1977]107ITR710(All)
ActsIncome Tax Act, 1922 - Sections 28(1) and 31(3)
AppellantCommissioner of Income-tax
RespondentRameshwardas Ram Narain
Appellant AdvocateR.R. Misra, Adv.
Respondent AdvocateAshok Gupta, Adv.
Excerpt:
- .....of the indian income-tax act, 1922. the order stated that the previous approval of the inspecting assistant commissioner for imposing the penalty had been obtained, but on appeal before the appellate assistant commissioner it was established that the income-tax officer sent his letter to the inspecting assistant commissioner seeking his approval after the order of penalty was passed. it was held that the order imposing penalty on the assessee was without jurisdiction because it was, in fact, passed without the requisite approval. at the end of the order of the appellate assistant commissioner it was further observed that 'the income-tax officer should take such action according to law as he deems necessary in this case '.2. the assessee felt aggrieved at this direction and filed an.....
Judgment:

Satish Chandra, J.

1. For the assessment year 1951-52 the Income-tax Officer, D-Ward, Meerut, by his order dated May 1, 1964, imposed upon the assessee a penalty of Rs. 15,000 under Section 28(1)(c) of the Indian Income-tax Act, 1922. The order stated that the previous approval of the Inspecting Assistant Commissioner for imposing the penalty had been obtained, but on appeal before the Appellate Assistant Commissioner it was established that the Income-tax Officer sent his letter to the Inspecting Assistant Commissioner seeking his approval after the order of penalty was passed. It was held that the order imposing penalty on the assessee was without jurisdiction because it was, in fact, passed without the requisite approval. At the end of the order of the Appellate Assistant Commissioner it was further observed that 'the Income-tax Officer should take such action according to law as he deems necessary in this case '.

2. The assessee felt aggrieved at this direction and filed an appeal before the Income-tax Appellate Tribunal. The Tribunal held that under Section 31(3)(f) of the Indian Income-tax Act, 1922, the Appellate Assistant Commissioner had power in the case of an order under Section 28 to either confirm or cancel or vary it so as either to enhance or reduce the penalty. This provision was interpreted as not conferring upon the Appellate Assistant Commissioner any jurisdiction to make the direction of the kind that he made in the appellate order. On this view, the last sentence mentioned above was cancelled, and to this extent the assessee's appeal was allowed.

3. At the instance of the Commissioner of Income-tax, the Tribunal has referred the following question of law for the opinion of this court:

'Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the direction of the Appellate Assistant Commissioner in his order against the penalty imposed under Section 28(1)(c) ?'

4. Section 31(3)(f) of the Act confers appellate jurisdiction with regard to an order under Section 28. Under it there is no power of making direction of the kind the Appellate Assistant Commissioner has done in the present case. In the next place, the Income-tax Officer cannot, in law, proceed for imposition of penalty under Section 28(1)(c) merely because the Appellate Assistant Commissioner gives a direction in this regard. If in law he did not have any jurisdiction to take any further action he cannot validly take such action. The direction in the appellate order that the Income-tax Officer should take such action according to law as he deems necessary in this case might have confused the situation. The Income-tax Officer was bound to take some action in accordance with the appellate direction.

5. For this reason also the Tribunal was justified in setting aside the direction.

6. Our answer to the question referred to us is in the affirmative and in favour of the assessee and against the department. The assessee shall get his costs which are assessed at Rs. 200.


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