1999 (12) TMI 40

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.... J.---The ITAT has referred the following questions of law arising out of its order dated 24th June, 1996, in respect of the assessment year 1986-87 : "1. On the facts and in the circumstances of the case, whether the Tribunal is right in holding that failure to obtain the previous permission from the Inspecting Assistant Commissioner of Income-tax for imposing the penalty under section 271(1)(....

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....e at Rs. 2,17,970. Penal proceedings under section 271(1)(c) of the I. T. Act, 1961, were initiated and penalty of Rs. 17,520 was levied. On appeal, the first appellate authority cancelled the penalty holding that the Assessing Officer did not obtain the previous approval of the Inspecting Assistant Commissioner as required under section 274(2) of the Act. On appeal by the Revenue, the Tribunal re....

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....the approval required by the proviso to clause (iii) of section 271(1)(c) of the Act is only a procedural irregularity not involving the question of jurisdiction. In the case of Guduthur Bros. v. ITO [1960] 40 ITR 298 (SC), notice for penalty was issued but opportunity of hearing was not given. The Appellate Assistant Commissioner set aside the order imposing the penalty as defective and directed ....

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....ken during the course of assessment proceedings and those proceedings are concluded. In our opinion, the notice issued to the appellants to show cause why penalty should not be imposed on them did not cease to be operative, because the Appellate Assistant Commissioner pointed out an illegality which vitiated the proceedings after it was lawfully initiated. That notice having remained still to be d....