1990 PLP 668 (PTD)

Held, that (1) whether the Tribunal was justified in interfering with the order passed by the Appellate Assistant Commissioner for all or any of the reasons stated by it, and (2) whether the order of remit passed by the Appellate Assistant Commissioner was liable to be interfered with by the Tribunal, were questions of law fit to be referred. P.K.R. Menon and N.R.K. Nair for the Commissioner. K.S. PARIPOORNAN, J.‑‑The Revenue is the petitioner herein. The respondent is an assessee to income‑tax. We are concerned with the assessment year 1976‑

77. The assessment was completed on March 21, 1979. Penalty proceedings were initiated under section 271(1)(a) of the Income‑tax Act, by notice dated March 21, 1979, which was served on the assessee on March 27, 1979. The respondent/assessee filed a reply thereto on March 29, 1979. An order imposing the penalty was passed on March 18, 1981, by the successor Income‑tax Officer, in exercise of his powers under section 271(1)(a) of the Income‑tax Act. The respondent/assessee took up the matter in appeal. The Appellate Assistant Commissioner, by order dated December 30, 1983, held that the levy of penalty cannot be sustained since the successor Income‑tax Officer who levied the penalty did not give an opportunity to the respondent/assessee to be heard. The order imposing the penalty was set aside and a direction was given to the Income‑tax Officer to pass a fresh order after affording an opportunity to the respondent/assessee of being heard. The respondent/assessee filed an appeal before the Income‑tax Appellate Tribunal. The Appellate Tribunal, after holding that the successor Income‑tax Officer had no authority to pass an order without affording an opportunity to the assessee which rendered the penalty order void, quashed the proceedings passed by the Income‑tax Officer as well as the Appellate Assistant Commissioner. The Revenue filed an application under section 256(1) of the Income‑tax Act praying that the questions of law formulated in para. 7 of the original petition may be referred to this Court. The Appellate Tribunal rejected the said application. Thereafter, the Revenue has filed this original petition under section 256(2) of the Act praying that the Income‑tax Appellate Tribunal may be directed to refer the questions of law formulated in para. 7 of the original petition for the decision of this Court. We heard counsel for the Revenue, Mr. Menon. The assessee/respondent was not represented before us. The order passed by the Appellate Assistant Commissioner dated December 30, 1983, was not appealed against by the Revenue. So far as the Revenue is concerned, the said order is final, subject to further orders that may be passed by the Tribunal or this Court. The order passed by the Appellate Assistant Commissioner dated December 30. 1983, held that the order imposing penalty cannot be sustained in the absence of an opportunity being afforded to the assessee before levying the penalty by the successor‑Income‑tax Officer. The Appellate Assistant Commissioner set aside. the order of the Income‑tax officer and ordered a remit. The Income‑tax Officer was directed to pass a fresh order. The sole question that arises for consideration is, was the Appellate Tribunal justified in cancelling the order passed by the Appellate Assistant Commissioner as also the Income‑tax Officer in toto without passing the consequential direction that the Income‑tax Officer shall pass a freS4 order after giving an opportunity to the assessee of being heard? The real question that arises for consideration is, was the Appellate Tribunal justified in setting aside the order passed by the Appellate Assistant commissioner in all the circumstances of the case? The questions formulated in para. 7 of the original petition do not pointedly bring out the question of law that arises out of the appellate order passed by the Tribunal dated July 23, 1986. We are of the view that the two questions of law arise out of the appellate order passed by the Appellate Tribunal in I.T.A. No. 152(Coch)/1984, dated July 23, 1986. The questions are as follows:‑‑ "(1) Was the Appellate Tribunal justified in law in interfering with the order passed by the Appellate Assistant Commissioner dated December 30, 1983, for all or any of the reasons stated by it? (2) Was the order of remit passed by the Appellate Assistant Commissioner, in any way, infirm or liable to be interfered with by the Appellate Tribunal?" We, accordingly, direct the Income‑tax Appellate Tribunal to refer the above questions of law for the decision of this Court, alongwith a statement of the case and other Annexures. This shall be done within a period of two months from the date of receipt of a copy of this judgment. The original petition is disposed of as above. Z.S./741/T Petition disposed of.