AI Drafter 
TaxTMI 
TaxTMI 
1981 (9) TMI 186
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....efore, the AAC has erred in observing that the assessee was not aware of the difference in stock particulars before the assessment was finalised by the sales tax department. On behalf of the assessee, the learned counsel Shri Anjaneyulu submitted than an assessee has the option to file appeals either before the AAC under section 246(1) or before the Commissioner (Appeals) under section 246(2). In this connection he referred to the expression "may" appearing in both the above sub-sections which according to him clearly indicated that the Legislature has given the option to the assessee to either appeal to the AAC or to the Commissioner (Appeals). He, therefore, urged that the order of the AAC was not bad in law. He relied heavily on the order of the AAC on the merits of the case. He pointed out that the assessee was not guilty of suppression of stocks or sales, that the sales tax authorities found out a difference in the weight of the goods as per the bill and as per the lorry receipts, that the above difference occurred due to inclusion of weight of packing material in the lorry receipts whereas in the vouchers the net weight was only taken, that the addition made by the sales tax ....
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....ppeal to the Commissioner (Appeals) against such order--- (g) an order imposing a penalty under clause (c) of sub-section (1) of section 271 where such penalty has been imposed with the previous approval of the Inspecting Assistant Commissioner under the proviso to clause (iii) of sub section (1) of that section ;". Sub-section (1), clause (o) and sub-clause (iii) of section 246 reads as follows : "(1) Subject to the provisions of sub-section (2), any assessee aggrieved by any of the following orders of an Income-tax Officer may appeal to the Appellate Assistant Commissioner against such order--- (o) an order imposing a penalty under--- (iii) section 271, or (iiia) section 271A, or" A plain reading of the above provisions clearly shows that after the introduction of sub-section (2), an appeal against an order of penalty which was imposed with the previous approval of the IAC under the proviso to clause (iii) of section 271(1), would lie only to the Commissioner (Appeals). We are unable to agree with the submission of the learned counsel for the assessee that the assessee is given an option to choose either the AAC or the Commissioner (Appeals) for preferring ap....
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...., then there is no need for the above sub-section (3). We are, therefore, of the considered opinion that the appeals against the orders specified in sub-section (2) of section 246 ought to be proceeded with and disposed of only by the Commissioner (Appeals) and not by the AAC. We, therefore, accept the contention of the revenue and hold that the AAC has no jurisdiction to proceed with the appeal filed before him by the assessee against the order of the ITO passed under section 271(1)(c) and consequently the order passed by the AAC which is in appeal before us is void in law. In view of this finding of ours, it is neither proper nor necessary for us to go into the merits of the case which were extensively argued before us by the parties. 4. Now the point that arises is what direction should be issued for a proper disposal of the matter. The learned departmental representative has referred us to the ruling of the Supreme Court in the case of CIT v. Bhikaji Dadabhai & Co. [1961] 42 ITR 123 and at page 126 their Lordships of the Supreme Court observed that even if the ITO committed an error in passing the order imposing the penalty because the conditions necessary for invoking that ....
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....partmental representative, however, argued that the above decision of the Calcutta High Court would not apply to the facts of this case. He submitted that in that case the order passed by the Tribunal was held to be void but the Tribunal had jurisdiction to entertain the appeal and, therefore, the said decision would not apply to this case. 5. After perusing the recent judgment of the Supreme Court referred to above and cited on behalf of the assessee and after considering the rival submissions with reference to the direction to be given in this case, we find that the dictum laid down by the Supreme Court in the latest judgment referred to above has to be followed. As pointed out above the Supreme Court has laid down the dictum that "an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute". In the instant case, as held by us above, the AAC has no jurisdiction to dispose of the appeal filed by the assesse....