Andhra HC (Pre-Telangana)
Srinivasa Pitti And Sons vs Commissioner Of Income-Tax on 24 February, 1988
Equivalent citations: [1988]173ITR306(AP)
JUDGMENT Y.V. Anjaneyulu, J.
1. The question referred for consideration, on a direction from this court under section 256(2) of the Income-tax Act, 1961, is as under :
"1. Whether, on the facts and in the cirumstances of the case, the Income-tax Appellate Tribunal was justified in setting aside the order of the Appellate Assistant Commissioner, cancelling the levy of penalty of Rs. 3,021 by the Income-tax Officer under section 271(1) (c) of the Income-tax Act, on the basis of a defective show-cause notice issued by the Income-tax Officer ?"
2. The matter relates to the assessment year 1969-70. Pursuant to a notice dated March 12, 1974, issued to the assessee, a penalty of Rs. 3,021 was levied under section 271(1) (c) of the Income-tax Act. The assessee challenged the order levying the penalty in an appeal before the Appellate Assistant Commissioner on two grounds. Firstly, he urged that the show-cause notice issued was defective and, secondly, no penalty was leviable on merits. The Appellate Assistant Commissioner accepted the former contention and allowed the appeal.
3. The Revenue filed an appeal before the Tribunal. The Tribunal accepted the Revenue's contention that there was no defect in the show-cause notice. Consequently, it directed the Appellate Assistant Commissioner to consider the question regarding merits. Aggrieved by the aforesaid order, the matter has been carried to this court by the assessee. Looking at the notice under section 274 dated March 12, 1974, we are inclined to accept the assessee's contention that the notice was defective, because the relevant portion in the notice concerning the levy of penalty for concealment of income and giving inadequate particulars of income was struck off. Fortunately, for the Revenue, however, the assessee understood the notice as one for the levy of penalty under section 271(1) (C) of the Income-tax Act. Accordingly, he sent a reply. The asses see's reply was considered and penalty was levied. We, therefore, think that no prejudice is caused to the assessee by the defective nature of the notice as he has had full opportunity before the Income-tax Officer to set out his defence against the levy of penalty under section 271(1) (C) of the Act. In that view, we consider that the order of the Income-tax Officer levying penalty under section 271(1) (C) of the Act does not suffer from want of jurisdiction. Support for this view can be found in a decision of this court in CIT v. Chandulal .
4. Mr. A. Satyanarayana, learned counsel for the assessee, represents to this court that the matter relates to 1969-70 and as nearly two decades have since elapsed, the question regarding the merits remained unresolved causing considerable hardship to the assessee. It was pointed out that although there was a direction by the Tribunal to the Appellate Assistant Commissioner to decide the case on merits, the matter was not taken up by the learned Appellate Assistant Commissioner and in the meantime some complications had set in. We cannot overemphasise the need on the part of the appellate authorities to deal with all the contentions urged at the time of disposal of the appeal. The practice of taking up one amongst several contentions and allowing the appeal on that ground would result in piecemeal disposal of the appeal causing considerable time-lag and consequent hardship on account of the superior appellate authorities taking contrary views in the matter. In the interests of all concerned, appellate authorities like the Appellate Assistant Commissioner Commissioners, Commissioner (Appeals) and the Tribunal, should address themselves to all the contentions raised before them and dispose of them so that there is a decision on all the points urged. When the matter is processed, no further time will be lost by the necessity to remand the matter on matters not considered. We hope the learned Appellate Assistant Commissioner will take up the matter without further delay and record his views on the question on merits. The reference is answered accordingly. No costs.