Appellate power under penalty provisions cannot authorise further action where jurisdiction is lacking; direction was rightly deleted.

Section 31(3)(f) of the Indian Income-tax Act, 1922 conferred appellate jurisdiction over orders under section 28, but did not authorise the Appellate Assistant Commissioner to direct the Income-tax Officer to take further action on a penalty imposed under section 28(1)(c). The Tribunal was justified in deleting the direction because it could not validate any further penalty action where jurisdiction was otherwise lacking, and the wording also risked confusion by implying action according to law. The reference was answered in favour of the assessee.

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Issues: Whether the Appellate Assistant Commissioner had power under section 31(3)(f) of the Indian Income-tax Act, 1922 to direct the Income-tax Officer to take further action in relation to a penalty imposed under section 28(1)(c), and whether the Tribunal was right in cancelling that direction.

Analysis: Section 31(3)(f) conferred appellate jurisdiction in relation to orders under section 28, but did not authorise the Appellate Assistant Commissioner to issue a direction requiring further action of the kind recorded in the appellate order. The direction could not validate any further penalty action when the Income-tax Officer otherwise lacked jurisdiction to proceed. The impugned sentence was also capable of creating confusion by suggesting that action should be taken according to law, and the Tribunal was therefore justified in deleting it.

Conclusion: The Tribunal was right in cancelling the direction, and the question referred was answered in the affirmative, in favour of the assessee and against the department.

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