1980PTD 185 (PLP)

The assessee preferred an appeal before the Appellate Assistant Commissioner against this order of penalty. Having failed there, a further appeal was preferred before the Income‑tax Appellate Tribunal. The Tribunal, however, set aside the order of penalty on the ground that the Income‑tax Officer showed the status of the assessee in the notice under section 18‑A(1) of the Act as "Company" instead of a "firm". It is clearly by stated in the state ment of the case that though the notice showed incorrect status of the assessee the assessment made subsequently was on the basis of the correct status of the assessee, namely, an unregistered firm. The assessee, however, in its appeal before the Assistant Commissioner, claimed that the mistake by itself was sufficient to justify the setting aside of the order of penalty, for the notice which was the basis of the proceedings was void. The Assistant Commissioner rejected the contention but the Tribunal accepted the objection raised on behalf of the assessee and set aside the impugned order and after having done so, at the instance of the Department referred the questions mentioned at the outset for our opinion. On a perusal of the appellate order of the Tribunal made on 1oth July, 1961, we find that the Tribunal has noted that the notice served on the assessee mentioned the status incorrectly and on that ground set aside the order of penalty. The Tribunal noticed that the Income‑tax Appellate Assistant Commis sioner dismissed the appeal on the ground that the assessee was identifiable in spite of the wrong status shown in the notice. But it however, observed that identifiability of the assessee had no practical importance. The Tribunal proceeded to observe further that mistake in a notice "may very often be misleading". It has nowhere recorded a finding to the effect that, in the facts and circumstances of the case, the assessee was, in fact, misled by the notice in question. The Appellate Assistant Commissioner, on the other hand, found as follows: ‑ "From the records I find that of the imposition of penalty the appellant filed an estimate showing `nil income' in compliance to the notice under section 18‑A issued by the I. T. O. So it is clear that the appellant did neither pay the demand nor filed an estimate before the due dates not because of the clerial mistake of noting wrongly status in the notice but for the reason best known to it." The same notice in consequence of which the penalty was imposed was subsequently complied with and the assessee filed an estimate showing 'nil income'. This shows that the assessee was identifiable and it felt that step should be taken in compliance with the notice. Identifiability has an important bearing on the question as to whether it has been misleading or not. Moreover, the Appellate Assistant Commissioner has further found that taking steps under the same notice clearly indicates that non‑issue of a fresh notice has not in any way prejudiced the assessee. The Appellate Tribunal has not dissented from this finding of fact nor has i` recorded any finding of fact to the effect that the incorrect status misguided or misled the assessee for which no step was taken by it. Mr. Azim, learned Advocate for the assessee, argues that the notice having shown the status of the assessee incorrectly was void and on that ground alone order imposing penalty is to be set aside. We cannot accept this contention of the learned Advocate. A clerical mistake in a notice would not by itself justify the setting aside of as order. In this case it is to be seen that receipt of the notice is not denied, nor has it been stated anywhere that the notice could not be complied with because of the clerical error in question. When the penalty was imposed, a legal objection was taken to the effect that the notice being void, the assessee was not liable for penalty. We are of opinion that this is not the position in law. A clerical mistake or error in the notice would not by itself justify a quashing of the proceeding unless it is shown that by such an error or mistake the assessee was misled and that he was prejudiced thereby. There being no finding in the order of the Appellate Tribunal to the effect that the assessee was misled by the incorrect statement about the status in the notice, the Tribunal was not justified in setting aside the order of penalty. Reliance has been placed by Mr. Afzalul Haq in the case of Moti Lal and another v. Income‑tax Officer, District II (iii), Kanpur 44 I T R

454. In that case a Division Bench of the Allahabad High Court observed as follows: ‑ "The contention that the notice under section 29 is incorrect and illegal because the status of the partners was incorrectly mentioned has no force. The status appears to have been mentioned as in the original notice issued to the unregistered firm and the status might correctly have been shown as that of an ex‑partner of an unregistered firm. The notice was otherwise in the form prescribed and the object of the service of a notice of demand asking the person concerned to pay the amount was clearly expressed in that notice. The notice is not ambiguous. Nor has it been made out that it misguided or caused any misapprehension or doubt in the mind of the petitioners. This clerical error, therefore, would not justify quashing of that notice." To the same effect is the decision in the case of Tarak Nath Bagchi.v. Commis sioner of Income‑tax, Bengal 14 ITR

319. In that case a Division Bench of the Calcutta High Court consisting of Gentle and Ormond, JJ. observed as follows: - "There is no doubt that notice was served upon the applicant. Although it was in the name of the undivided family of P. M. Bagchi & Co., it related to the business of which the applicant was a receiver. No exception whatever was taken to the notice or its form. Indeed, the applicant in his letter of the 20th January, 1937, makes it quite clear that he had accepted the notice and the matters with regard to assessment were acceptable to him and in that letter he merely asked that the case should be transferred to District No. 1(2) for his own convenience, inasmuch as the books of the business were kept at the place of business, in that area and were then being Id examined by the Income‑tax Officer of District No. 1(2). Sub-stance whatsoever in the objection raised to the name by which the assessee was indicated in that notice." Although the facts of the present case is different from that of Tarak Nath Bagchi just referred to above, it is clear that a clerical mistake by itself would not be sufficient to quash the proceeding arising out of the impugned notice. We have already sufficiently indicated that in the absence of any finding to the effect that the mistake in recording the status has vitiated the purpose and the utility of the notice under section 18‑‑A(1) of the Income tax Act and as such tie Tribunal ought not to have interfered with the order of the Appellate Assistant Commissioner and we, therefore, answer the question in the negative. We have also clearly stated above that the assessee did not take any other objection against the penalty except the incorrect statement of the status of the assessee in the notice. Since it is not asserted that it was misled or owing, to misapprehension as a result of incorrect description it was prejudiced, the second question must also be answered in the negative and we order accordingly. In the facts and circumstances of the case, we leave the parties to bear their own costs. HASAN, J.‑-I agree. Question answered in the negative.