Successor income-tax officer need not issue fresh penalty hearing when assessee filed only a written reply

Where penalty proceedings under the Indian Income-tax Act, 1922 had been initiated by one Income-tax Officer and the assessee filed only a written reply without appearing or seeking rehearing, the successor Income-tax Officer could continue the matter from the stage left by the predecessor and act on the existing record. A fresh opportunity of showing cause was required only where the assessee had exercised the statutory right to rehearing or where the proceeding had moved beyond mere written objections. On those facts, no further notice was necessary before imposing penalty.

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Issues: Whether, after a penalty notice under section 28 of the Indian Income-tax Act, 1922 had been issued by one Income-tax Officer and the assessee had filed only a written reply without appearing or asking for rehearing, the successor Income-tax Officer was bound to give a fresh opportunity of showing cause before imposing penalty.

Analysis: The reference turned on the combined operation of the penalty provisions and section 5(7C) of the Indian Income-tax Act, 1922. The assessee did not appear on the date fixed in the notice, did not seek oral hearing, and filed only a brief written explanation. On those facts, the successor officer was entitled to continue the pending proceedings from the stage left by his predecessor and to act on the written representation already on record. A fresh opportunity was required only where the assessee had exercised the statutory right to seek rehearing or where the earlier proceeding had advanced beyond the stage of mere written objections.

Conclusion: The succeeding Income-tax Officer was not obliged to give another opportunity of showing cause before imposing penalty.

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