Madhya Pradesh High Court
Prabhudayal Amichand vs Commissioner Of Income-Tax on 8 March, 1989
Equivalent citations: [1989]180ITR84(MP)
JUDGMENT
G.G. Sohani, Actg. C.J.
1. By this reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in setting aside the order dated March 31, 1980, passed by the Income-tax Officer under Section 271(1)(c) of the Income-tax Act, 1961, and directing him to pass a fresh order in accordance with law instead of upholding its cancellation ?"
2. The material facts giving rise to this reference, briefly, are as follows :
During the course of the assessment proceedings for the assessment year 1973-74, the Income-tax Officer noticed that the assessee had furnished inadequate particulars of its income. The Income-tax Officer, therefore, initiated proceedings aganst the assessee under Section 271(1)(c) of the Act and a notice under Section 274 of the Act was served on the assessee. The Income-tax Officer, after recording his satisfaction that the assessee had concealed income to the extent of Rs. 45,245, levied penalty under Section 271(1)(c) of the Act. Aggrieved by the order passed by the Income-tax Officer, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). It was contended on behalf of the assessee that the order passed by the Income-tax Officer deserved to be quashed as no approval of the Inspecting Assistant Commissioner, as required by the proviso to Clause (iii) of Section 271(1) of the Act, was obtained by the Income-tax Officer and no opportunity of hearing was given to the assessee. The Commissioner of Income-tax (Appeals) upheld these contentions and quashed the order passed by the Income-tax Officer. Aggrieved by the order passed by the Commissioner of Income-tax (Appeals), the Revenue preferred an appeal before the Tribunal. The Tribunal held that the Commissioner of Income-tax (Appeals), instead of quashing the order passed by the Income-tax Officer, imposing penalty, should have remitted the matter to the Income-tax Officer for passing a fresh order in accordance with law. In this view of the matter, the Tribunal allowed the appeal and directed the Income-tax Officer to pass an order afresh in accordance with law. Aggrieved by the order of the Tribunal, the assessee sought reference and it is at the instance of the assessee that the aforesaid question of law has been referred to this court for its opinion.
3. Having heard learned counsel for the parties, we have come to the conclusion that this reference must be answered in the affirmative and against the assessee. The Tribunal, in our opinion, has rightly held, relying upon the decision of this court in Kimtee v. CIT [1985] 151 ITR 73, that a procedural irregularity not involving the question of jurisdiction can be cured.
4. Our answer to the question referred to this court is, therefore, in the affirmative and against the assessee. In the circumstances of the case, parties shall bear their own costs of this reference.