1975 (10) TMI 10

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....nafter referred to as " the Act "), for a direction to the Appellate Tribunal to state a case and refer the following questions for opinion of the court : " (1) Whether, in the facts and circumstances of the case, the Appellate Assistant Commissioner under section 251(b) of the Income-tax Act, 1961, had power and jurisdiction to validate and enhance the order of penalty imposed under section 27....

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....not give any explanation. The Income-tax Officer imposed penalty of Rs. 2,570. In assessee's appeal before the Appellate Assistant Commissioner, the appellate authority noticed that the Income-tax Officer had committed error in calculation of the period of default and had also overlooked the provision of section 271(2) of the Act. Accordingly, the appellate authority issued notice of enhancemen....

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.... the law for enhancing the demand of penalty. According to the learned counsel the imposition of penalty by the Income-tax Officer was a nullity and, therefore, the order which was a nullity could not be rectified by the appellate authority. In support of his contention Mr. Ray cited two decisions. The first one is the case of Padgilwar Brothers v. Commissioner of Income-tax [1971] 81 ITR 258 (....

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....y, both the Income-tax Officer as also the first appellate authority have been conferred jurisdiction to initiate a proceeding for imposition of penalty. Once it is conceded that the appellate authority had jurisdiction to rectify the defect appearing in the order of the Income-tax Officer and in case rectification required enhancement, the first appellate authority having that power, an enhanc....