TaxTMI 
TaxTMI 
1987 (7) TMI 68
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....the Tribunal was competent to entertain the assessee's appeal particularly when no appeal could lie to the Appellate Assistant Commissioner against the Income-tax Officer's order under section 46(1) due to non-payment of tax ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the penalty levied upon the assessee by the Income-tax Officer under section 46(1) of the Indian Income-tax Act, 1922 ?" Regarding assessment year 1957-58: "(1) Whether the Tribunal was competent to entertain the assessee's appeal particularly when no appeal could lie to the Appellate Assistant Commissioner against the Income-tax Officer's order under section 46(1) due to non-payment of tax ? (2) Whether, o....
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....he entire tax dues in accordance with the directions contained in the order dated February 3, 1964, passed by the Tax Recovery Officer. It is on these facts that the question of imposition of penalty on the assessee arose under section 46(1) of Indian Income-tax Act, 1922, and section 221(1) of the Income-tax Act, 1961, which are corresponding provisions, in respect of these three assessment years. It is clear from these provisions of section 46(1) of the 1922 Act and the corresponding provisions contained in section 221(1) of the 1961 Act that the imposition of penalty provided therein is within the discretion of the Income-tax Officer when the assessee is in default in making payment of income-tax. Obviously, the exercise of discretion....
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....nd on account of compliance with that order by the assessee, the Tribunal has held that the imposition of penalty for all these three years is not justified. Aggrieved by the Tribunal's order, the Revenue has obtained reference in the above manner for answering the abovequoted questions of law. In our opinion, the common question No. (1) for the assessment years 1956-57 and 1957-58 relating to the tenability of the appeal to the Appellate Assistant Commissioner against the Income-tax Officer's order under section 46(1) of the 1922 Act due to non-payment of tax need not be answered on the short ground that it does not arise out of the Tribunal's order. No doubt, the Tribunal's order does mention the fact of dismissal of appeal for these t....
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....bunal was undoubtedly impressed by this fact. It was open to the Tribunal to take this fact into account while reviewing the decision of the imposition of penalty by the Income-tax Officer. Having done so, the Tribunal has reached the conclusion that the imposition of penalty in these circumstances was not justified. This alone is sufficient to sustain the ultimate conclusion reached by the Tribunal. No doubt, the Tribunal has also held that on account of the Tax Recovery Officer's order dated February 3, 1964, the assessee cannot be treated as a defaulter for attracting section 46(1) of the 1922 Act or the corresponding provision of section 222(1) of the 1961 Act. It is unnecessary for us to consider and decide this point since the conc....