2014 (2) TMI 1075

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....cate, Mr. P.K. Bhowmik, Advocate, Mr. Ranjan Sinha, Advocate. ORDER The Court :- Both these two appeals were taken up together because the common questions of law have arisen in these two appeals. The appellant, Amal Ganguly, was served with a notice to show cause why penalty under Section 271B shall not be imposed upon him. To be precise the relevant portion of the show cause notice read....

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....cause. So why penalty U/s. 271B of Rs. 58,719 (().50% of Rs. 1,17,43,893/-) should not be levied." An identical notice was issued to the appellant, Sagar Dutta, which reads as follows :- " On a perusal of your return of income it appears that you derived income under the head Profit and gains of business or profession and the sums exceeded ten lakh rupees. As a person carrying on a professio....

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.... has finally come up before this Court. Mr. Biswas, learned Advocate appearing for the appellant submitted that in imposing the penalty there has been gross violation of sub-section 2 of Section 274 which provides as follows :- "274(2) No order imposing a penalty under this Chapter shall be made - a) by the Income Tax Officer, where the penalty exceeds ten thousand rupees; b) by the As....

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....s a question of fact. We are unable to accept this submission. It was the obligation of the Income Tax Officer to indicate in his order that he passed the order after obtaining requisite approval. Since the order passed by the Income Tax Officer does not contain the requisite recital, it has to be held that no such approval was obtained. The order itself is incompetent. An incompetent order is a n....