1985 (9) TMI 12

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....District IV(3), Calcutta, assessed the income of the assessee for the said assessment year under section 43 of the Income-tax Act, 1961, computing the total taxable income at Rs. 10,86,483. The Income-tax Officer also found that the assessee had concealed its income and issued a notice under section 274 read with section 271 of the Income-tax Act, 1961, as follows: Dated: March 24,1966. " M/s. Oriental Rubber Works, 171A, Mahatma Gandhi Road, Calcutta. Whereas in the course of proceedings before me for the assessment year 1961-62, it appears to me that you have concealed the particulars of your income or deliberately furnished inaccurate particulars of such income and whereas the penalty proceedings have to be referred to the Inspe....

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....as it appears to me that you have concealed the particulars of your income or deliberately furnished inaccurate particulars of such income for the assessment year 1961-62; You are hereby requested to appear before me at 1.15 p.m. on March 5, 1968, and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) of the said Act. If you do not wish to avail yourself of this opportunity of being heard, in person or through authorised representative, you may show cause in writing on or before the said date which will be considered before any such order is made under section 271(1)(c)." On March 27, 1968, the Inspecting Assistant Commissioner of Income-tax, Range XVII, Calcutta, passed an order under section....

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....t earlier. It was contended that the authority competent to initiate the penalty proceedings was the Income-tax Officer who during the course of assessment had to be satisfied that there had been concealment or escapement of income. The Income-tax Officer, Special Circle VII, Calcutta, had nothing to do with the order of assessment and the initiation of penalty proceedings by him by referring the matter to the Inspecting Assistant Commissioner was illegal and void. The penalty imposed on the assessee was also void in consequence. In support of his contentions, the learned advocate for the assessee cited several decisions of this court and that of the Supreme Court. On an examination of the original records of the proceeding which were....