TaxTMI 
TaxTMI 
2017 (8) TMI 937
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....partment of Income Tax. In the order dated 3091988 passed in such proceedings, two crucial findings were recorded ( i) that the assessee has concealed the particulars of his income for the Assessment Year 198788; and (ii) that he has furnished the inaccurate particulars of such income. It holds that against the net profit of Rs. 11,02,329.38, the assessee has declared the net profit of Rs. 1,90,808.38 in the return of income filed on 1101987. Thus, there was clear suppression of income by the assessee to the extent of Rs. 9,11,521/. 2. The Income Tax Officer, who made this assessment, issued the notice dated 30-9-1988 to the assessee proposing to impose the penalty under Section 271 of the Income Tax Act and initiated the proceedings. The ....
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.... Tax Appellate Tribunal referred the following questions as the questions of law for determination of this Court arising out of its order dated 7-1-1994. "1. Whether on the facts and in the circumstances of the case, the levy of penalty is legal and justified? 2. Whether on the facts and in the circumstances of the case, the assessee was given a reasonable opportunity of being heard? 3. Whether on the facts and in the circumstances of the case, the approval of Deputy Commissioner of Income Tax, Range1, is in accordance with law? 4. Whether on the facts and in the circumstances of the case it was necessary for the Deputy Commissioner of Income Tax to give an opportunity to the assessee before granting approval to the order imposing pe....
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....irement cannot be read in it. 8. In order to consider the rival contentions, we have to see the provision of Section 271 of the Income Tax Act to the extent relevant in the present case, as it stood on the date of passing of the order of imposing the penalty. Hence, the said provision is reproduced below : "Failure to furnish returns, comply with notices, concealment of income, etc. 271. (1) If the Incometax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, (iii) in the cases referred to in clause (c)....
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....r imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard in the matter. If any order is passed imposing the penalty, it can be the subject matter of statutory appeal under Section 246 of the said Act before the Commissioner of Income Tax (Appeals) and thereafter a further appeal to the Income Tax Appellate Tribunal. 11. In the case of concealment of particulars of income and furnishing of inaccurate particulars of such income, clause (iii) under Section 271(1)(c) of the Income Tax Act empowers the imposition of penalty in addition to any tax payable by the assessee, a sum which shall not be less than, but which shall not exceed twice, the amount of t....
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.... it cannot be split up. The requirement of obtaining previous approval of the Inspecting Assistant Commissioner is a step in such proceedings to be mandatorily complied with by the competent authority (in the present case, the Income Tax Officer). The noncompliance of it may vitiate the order imposing the ultimate penalty. The provision nowhere contemplates another opportunity of being heard in the matter before granting approval. The power to grant previous approval is purely administrative in nature. The object is to safeguard the interest of assessee against arbitrary exercise of power by the competent authority while imposing penalty. It is in the nature of control over the action of the subordinate authority. While granting previous ap....
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....ction 274 of the Income Tax Act for granting reasonable opportunity of being heard in the matter cannot be stretched to the extent of framing a specific charge or asking the assessee an explanation in respect of the quantum of penalty proposed to be imposed, as has been urged. The assessee was supplied with the findings recorded in the order of reassessment, which was passed on the same date on which the notice under Section 271(1)(c) was issued, initiating the proceedings of imposing the penalty. The assessee had sufficient notice of the action of imposing penalty. We, therefore, do not find either any jurisdictional error or unjust exercise of power by the authority. 16. It is not in dispute that a reasonable opportunity of being heard i....