Rajagopala Ayyangar, J.
1. These are petitions under Section 66(2) of the Income-tax Act invoking our jurisdiction to direct the Appellate Tribunal to state a case and refer a question of law to this court for its decision.
2. The two petitions relate to the assessment years 1943-44 and 1944-45 respectively and arise out of the proceedings imposing penalties upon the petitioner for concealment of the particulars of his income in the returns which he submitted for the respective years. The assessment for the year 1943-44 with which C.M.P. No. 3138 of 1956 is concerned was completed on 14-2-1945. Subsequent to the filing of the return the petitioner examined himself before the Income-tax Officer on 5-1-1944 and in the course of his examination he conceded that certain items of credit which were shown as if the moneys belonged to outsiders were really his own moneys and the profits of the business.
Similarly in regard to 1944-45 the assessment of which was completed on 30-11-1945 the assessee was examined before the officer on 26-11-1945 and he conceded that the return originally submitted was wrong and consented to certain additions to his income. The Income-tax Officer took action under Section 28(1)(c) and issued notice under Section 28(3) and when the assessee defaulted to appear in response thereto imposed on him penalties for concealing the particulars of his income or deliberately furnishing inaccurate particulars of the same within Section 28(1)(c) of the Act.
3. The imposition of the penalty was confirmed by the Appellate Assistant Commissioner though with some variation in the amount, and this has been affirmed by the Tribunal on further appeal.
4. Two points were urged by the learned advocate for the petitioner as points of law arising out of the order of the Appellate Tribunal. The first was as the assessee had appeared before the officer before the assessment was completed, accepted the truth and consented to the inclusion of the amounts omitted originally in the return as part of his assessable income, the concealment had not continued right upto the date of the assessment and was therefore not within Section 28(1)(c).
The argument was that as the assessee had a right to submit a revised return of his income--& his admission before the Income-tax Officer should be taken as such revised return--there was no concealment of the particulars of his income in this notionally revised return. We consider that there is no substance in this point particularly in view of the finding of the Income-tax authorities, that the admission by the assessee was made after the Income-tax Officer had come to know of the facts, and that in the circumstances he was forced to admit these facts. Even apart from this, we consider that Section 28(1)(c) would be attracted if there had been a deliberate concealment of particulars in any return, and in the circumstances of the present case it is clear that the original return did not disclose considerable portions of the income and the finding is that the concealment was deliberate.
Further the return for 1944-45 was filed after the petitioner was examined before the Income-tax Officer on 5-1-1944, and there can therefore be no doubt that dishonest concealment is fully established for the second year. In these circumstances, we do not see any substance in the first point of law urged on behalf of the petitioner.
5. The second ground urged before us was that the notice under Section 28(3) which preceded the imposition of the penalty was not in order and that this defect in the notice vitiated the order imposing the penalty. The point in this form was not urged either before the Appellate Assistant Commissioner or before the Appellate Tribunal eleven at the stage of his application under Section 66(1). There would therefore be no ground at all for permitting the petitioner to raise this ground at this stage. Rut in view of the possibility of this contention being raised in other cases, we have considered it proper to express our opinion on this point. Section 28(3) runs:
''No order shall be made under Sub-section (1) or Sub-section (2) unless the assessee or partner, as the case may be, has been heard, or has been given a reasonable opportunity of being heard.'
Learned counsel referred us to a decision of a Bench of the High Court of Orissa in Shrilal v. Commr of Income-tax, B & O : 28ITR837(Orissa) where the learned Judges have held that a notice in the form in which the notice was issued in the present case did not comply with the requirements of Section 28 (2). The notice issued in the present case stated (to quote the relevant words):
'Whereas in the course of the proceedings before me it appears to me that you have deliberately concealed the particulars of your income or deliberately furnished inadequate particulars of such income under Section 28(1)(c) I hereby call upon you to show cause in writing or in person at my office why a penalty under Section 28 should not be imposed.'' It was this notice which it was stated was not in conformity with the requirements of Section 28(3).
6. Section 28(3) requires that the party against whom the penalty is going to be imposed should before such imposition (a) be heard or (b) be given, a reasonable opportunity of being heard. What the notice issued to the petitioner stated was that ho might either show cause in writing or appear in person. The learned Chief Justice who delivered the judgment of the Orissa High Court, has categorically stated that a notice in the form adopted by the officer in the present case did not afford a reasonable opportunity to the assessee of being heard. The learned Chief Justice said:
'What the section contemplates is a hearing by the taxing authority or an opportunity to the assessee to be heard.' So far we are in agreement. The judgment continued:
'A person may show cause in writing without being present out it is obligatory on the Income-tax Officer to hear him or give him an opportunity of being heard, it should also be noticed that the assessee has been given the option of either sending his explanation, or being present in person while showing cause. Where the assessee sends his explanation by post the Income-tax Officer may or may not apply his mind to that explanation and impose the penalty none the less; it the officer does so, he clearly of lends both the language and the spirit of the provisions of Section 28 (3).'
With due respect to the learned Judges we are unable to agree with this reasoning. No doubt, if the assessee appears he has a right to be heard. Under Section 28(3) the alternative right of the assessee is to be afforded a reasonable opportunity of being heard. If the assessee, after being given such an opportunity chooses to he absent on the date of the hearing, it is not as if the proceedings for the imposition of the penalty became infrnctuoiis, or they have to be adjourned till the presence of the assessee is secured.
Where the notice issued permits the assessee to appear in person, but further affords him also an option to send in his representations in writing, it cannot be said that the notice docs not afford him an opportunity of oeing heard. The grant of a further option to the assessee to send in his written explanation does not, in our opinion, involve the negation of the option to be heard in person. The sub-section only requires that the assessee should be given a reasonable opportunity of being heard; and so long as this is granted it does not matter what other alternatives are afforded to the assessee in addition.
7. Assuming that the correct form of the notice were that it should convey merely an intimation to the assessee only to appear in person, and the asses-see chooses not to appear but sends instead his representations in writing, it cannot be urged that the representations should not be considered by the officer, but that the assessee should be treated as if he had not offered any explanation.
If on such a notice in such a form the representations could be considered by the officer, it stands to reason that a provision in the notice enabling this to be done cannot amount to deprivation of the assessee of the reasonable opportunity to be heard, which Section 28(3) guarantees. Grant of a reasonable opportunity to the assessee to be heard is sufficient compliance with the requirements of Section 28(3), whether or not that opportunity is availed of by the assessee, and whether or not there is a further direction in the notice that the assessee should present himself in person before the officer 'to be heard'.
The notices issued to the petitioner under Section 28 (3) were, in our opinion, in conformity with the law, and the penalties imposed were, therefore, lawful.
8. These petitions fail and are dismissed, with costs in one (C.M.P. No. 3138 of 1956). Counsel fee Rs. 150.