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Bindra and Co. Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Civil Case No. 232 of 1979
Judge
Reported in(1986)52CTR(MP)168
ActsIncome Tax Act, 1961 - Sections 271(1) and 271(4A); Wealth Tax Act, 1957
AppellantBindra and Co.
RespondentCommissioner of Income-tax
Appellant AdvocateB.C. Dhamore, Adv.
Respondent AdvocateB.K. Rawat, Adv.
Excerpt:
- .....of the assessee: ' whether, on the facts and in the circumstances of the case, the income-tax appellate tribunal was right in holding that no appeal was maintainable before the appellate assistant commissioner in view of the commissioner of income-tax's order under section 271(4a) of the income-tax act ?' 2. the material facts are these: the assessee is a wholesale vegetable vendor and for the assessment year 1967-68, assessment was made on a total income of rs. 36,000. the assessment was reopened under section 147 of the income-tax act and the assessee was asked to file the balance-sheet which disclosed a difference of assets over liabilities to the extent of rs. 14,812 which was added to the income and proceedings for imposition of penalty under section 271(1)(c) of the act were.....
Judgment:

1. This is a reference under Section 256(1) of the Income-tax Act, 1961, wherein the following question of law has been referred for the decision of this court at the instance of the assessee:

' Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that no appeal was maintainable before the Appellate Assistant Commissioner in view of the Commissioner of Income-tax's order under Section 271(4A) of the Income-tax Act ?'

2. The material facts are these: The assessee is a wholesale vegetable vendor and for the assessment year 1967-68, assessment was made on a total income of Rs. 36,000. The assessment was reopened under Section 147 of the Income-tax Act and the assessee was asked to file the balance-sheet which disclosed a difference of assets over liabilities to the extent of Rs. 14,812 which was added to the income and proceedings for imposition of penalty under Section 271(1)(c) of the Act were initiated by the Income-tax Officer. The explanation tendered by the assessee was not accepted and the Income-tax Officer levied a penalty of Rs. 14,812 by order dated February 16, 1974 (annexure 'A' with the petition). On appeal, the Appellate Assistant Commissioner, however, cancelled the penalty, vide his order dated April 12, 1977 (annexure 'B' with the petition). The Revenue thereafter preferred a second appeal before the Tribunal. It was contended by the authorised representative for the Department that the assessee having filed a petition before the Commissioner of Income-tax under Section 271(4A) of the Act for waiver of penalty, the appeal preferred by the assessee before the Appellate Assistant Commissioner was not maintainable. The Tribunal, agreeing with the contention raised on behalf of the Revenue, held that the Appellate Assistant Commissioner had no jurisdiction to entertain the appeal against imposition of penalty in view of the Commissioner of Income-tax's order dated March 7, 1973 (annexure ' C ' with the petition), whereby the application of the assessee for waiver of penalty under Section 271(4A) of the Act was rejected. Theorder of the Tribunal is dated July 31, 1978 (annexure ' D ' with the petition). Thereafter, the assessee sought a reference to this court on the above-referred question and this is how the matter has come up before this court for its decision.

3. It is to be seen whether in spite of the order of rejection under Section 271(4A) of the Act passed by the Commissioner of Income-tax refusing waiver of penalty, the appeal to the Appellate Assistant Commissioner was maintainable. Under similar circumstances, dealing with the provisions of the Wealth-tax Act, 1957, wherein after imposition of penalty under Section 18(1)(a) of the Wealth-tax Act, an application for waiver of penalty under Section 18(2A) was made and rejected and the appeal was thereafter preferred, this court in Jagdish Agarwal v. CWT : [1983]143ITR941(MP) and CWT v. Kekatpure Ginning & Pressing Factory : [1984]145ITR813(MP) answered a similar question about the maintainability of the appeal in favour of the assessee and against the Department.

4. It is not disputed by the learned counsel appearing for the parties on either side that the provisions for waiving the penalty and for appeal under the Income-tax Act, 1961, are almost similar with the provisions for appeal under the Wealth-tax Act, 1957. It is thus clear under the facts and in the circumstances of the case, that merely because the Commissioner of Income-tax had chosen not to waive the penalty, it could not be a ground for holding that the appeal preferred by the assessee before the Appellate Assistant Commissioner was not maintainable.

5. In our opinion, the matter thus stands fully concluded by the aforesaid two decisions of this court and the question referred has to be answered in favour of the assessee and against the Department by holding that under the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was not right in holding that no appeal was maintainable before the Appellate Assistant Commissioner in view of the orders under Section 271(4A) of the Commissioner of Income-tax. However, since the appeal preferred by the Department has been rejected not on merits, the matter shall be remanded to the Tribunal for decision on merits in accordance with law. There shall be no order as to costs.


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