TaxTMI 
TaxTMI 
1998 (10) TMI 59
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....rder dated December 14, 1981, passed by the Income-tax Officer under section 271(1)(c) of the Income-tax Act was not barred by the period of limitation prescribed under the Income-tax Act ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Income-tax Officer had the jurisdiction to levy the penalty under section 271(1)(c) of the Income-tax Act ?" The brief facts giving rise to this reference are that the firm in its return for the assessment year 1972-73 claimed deduction of Rs. 1,36,000 representing interest credited to the account of Prabhudayal Surajbhan of Indore. It is an admitted fact that two of the four partners of the assessee-firm were partners of Prabhudayal Surajbha....
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....ribunal by order dated December 20, 1982, in I. T. A. No. 921 of 1981. Aggrieved against the said order of the Income-tax Officer, an appeal was preferred before the Commissioner of Income-tax (Appeals) challenging the order of imposition of penalty on various grounds ; viz., the order dated December 14, 1981, levying penalty was beyond the period of limitation prescribed under the Act and, secondly, as per the original assessment order dated March 22, 1975, the matter of imposing penalty was referred to the Inspecting Assistant Commissioner, who in accordance with the existing law, had the jurisdiction to levy penalty and, therefore, the order dated December 14, 1981, was without jurisdiction, and, thirdly, the assessee was neither guil....
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....r after affording a reasonable opportunity of being heard (meanwhile amendment dated April 1, 1976, came into force authorising the Income-tax Officer to pass the order). The said directions of the Commissioner of Income-tax were challenged by the assessee in appeal before the Tribunal, but the Tribunal by the order dated December 20, 1982, upheld the order of the Commissioner of Income-tax, and, therefore, the order passed by the Tribunal became final. The order dated December 14, 1981, was passed in compliance with the order of the Commissioner of Income-tax. Therefore, when the second order was passed by the Income-tax Officer on December 14, 1981, it was in pursuance of the order passed by the Commissioner of Income-tax under section 26....
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....the Income-tax Act, which was confirmed by the Tribunal. Therefore, the finding given by the Tribunal in its earlier order, which was not challenged before the High Court, became final. It is wrong to say that the Income-tax Officer had no jurisdiction and the order in question is barred by time. In this connection, our attention was invited to the decision of the Supreme Court in the case of Varkey Chacko v. CIT [1993] 203 ITR 885. In fact, that case is wholly distinguishable on the facts. In Chacko's case [1993] 203 ITR 885(SC), the Tribunal set aside the order and held that two aspects must be borne in mind, namely, who may impose the penalty and in what measure. It is true that if the original proceedings are quashed and the case is rem....