The Commssioner Of Income Tax, Madras ... vs S.V. Angidi Chettiar on 9 January, 1962
5. It was contended on behalf of the assessee that, no satisfaction was recorded by the Income-tax Officer before the issuance of the notice under section 271(1)(c) of the said Act. It was pointed out that, in the assessment order dated January 19, 1973, the provision of section 271(1)(a) was written and merely because the notice which was issued thereafter was under section 271(1)(c), it could not be said that the Income-tax Officer had arrived at the requisite satisfaction before the issuance of the notice. Reliance was placed on the decisions of the Supreme Court in CIT v. S. V. Angidi Chettiar [1962] 44 ITR 739 and D. M. Manasvi v. CIT [1972] 86 ITR 557, in support of the proposition that the satisfaction was required to be arrived at by the Income-tax Officer before the conclusion of the proceeding under the Act, i.e., the course of the assessment proceeding and the jurisdiction under section 271(1)(c) would depend upon the satisfaction of the concerned authority and not on the fact that the notice under section 271(1)(c) was subsequently issued. There can be no dispute about the proposition that the satisfaction of the Income-tax Officer in the course of the assessment proceedings regarding concealment of income or furnishing of false particulars would constitute the basis and foundation of the proceedings for levy of penalty under section 271(1)(c) of the said Act. Admittedly, the assessee had filed its return on June 30, 1969, and, therefore, there was no question of any late filing of return and it is obvious that reference to clause (a) of section 271(1) of the Income-tax Officer dated January 19, 1973, by which, while framing the assessment, he simultaneously directed notice to be issued was only a typographical error, if at all clause (a) is typed in the original order. Admittedly, the notice was issued pursuant to the said order under section 271(1)(c) of the said Act and it has never been contended thereafter by the assessee in response to that notice before the Inspection Assistant Commissioner or even before the Tribunal that the Income-tax Officer had not arrived at his satisfaction, because clause (a) was typed instead of clause (c) while directing penalty proceedings to be initiated against the assessee. In out view the assessee cannot, at this stage, attempt to gain advantage over an obvious typing error if at all it was there in the original order. The initiation was obviously for penalty under the provisions of section 271(1)(c) and that is how it had been understood by all concerned including the assessee until now. Merely because an obvious typing error had occurred in the order of the Income-tax Officer, it cannot be said that he may not have arrived at the requisite satisfaction. It is clear from the assessment order dated January 19, 1973, that the Income-tax Officer had, by his letter dated November 28, 1972, informed the assessee that the old proceedings were intended to be adopted for computing the income and farming the fresh assessment order. A notice under section 143(2) of the said Act was sent to the assessee on December 28, 1972. It appears that though the assessee was requested to produce necessary evidence, it did not comply with the notice and, ultimately, the Income-tax Officer, for reasons discussed in the earlier assessment order dated February 24, 1972, assessed the income of the assessee at Rs. 1,66,655. It is, thus, clear that the reasons which were given in the order dated February 24, 1972, were made part of the said order dated January 19, 1973 by incorporating the same by reference and, therefore, the order dated January 19, 1973, can not be read in oscillation while examining the question whether the requisite satisfaction was arrived at by the Income-tax Officer during the proceedings. Taking into account all the relevant facts and circumstances of the matter and the order passed by the Income-tax Officer dated January 19, 1973, which incorporated the reasons given in the earlier order dated February 24, 1972, by reference, the Inspecting Assistant Commissioner found that the Income-tax Officer had arrived at the requisite satisfaction during the course of the assessment proceedings and had issued notice under section 271(1)(c) of the Act. The Tribunal found that the Income-tax Officer had brought to the notice of the assessee by his letter dated December 28, 1972, discrepancies which had remained unexplained and several opportunities were given to the assessee to establish the genuineness of the transaction in question. The assessee did not, however, adduce any evidence to show as to how the peculiar and strange transactions had occurred. The material on record clearly indicates that the requisite satisfaction was arrived at by the Income-tax Officer before initiating the proceedings under section 271(1)(c) of the said Act and, therefore, the above decisions cited on behalf of the assessee cannot come to its rescue.