Law: Income Tax Act, 1922

Section: 28

Income tax Act (XI of 1922), S. 28 Penalty Imposed in assessment proceedings Cancellation " of penalty in appeal, on ground that assessee was not heard Show cause notice issued after completion of assessment Validity. Notice under section 28 of the Income tax Act, 1922, for the imposition of penalty in respect of the assessment year 1947¬48 was issued to the Assessee on March 21, 1952, the day on which the assessment was completed. The order levying penalty "was issued on January 31, 1955, but the order was cancelled on appeal by the Appellate Assistant Commissioner on the ground that the Assessee was not heard before the order was passed. A fresh notice was issued on July 12, 1956, calling upon the Assessee to appear before the Income tax Officer and to show cause why an order imposing penalty should not be made. The Assessee thereupon applied to the High Court for the issue of a writ of prohibition against the Officer on the ground that the Income tax Officer ceased to have any jurisdiction to issue the notice after the assessment proceedings were completed and that when an order imposing penalty was cancelled and the Department did not appeal, that order of cancellation became final; Held, (i) that the restriction imposed on the income tax authorities under section 28 was only with regard to their satis¬faction within the time when proceedings are pending before them as to the concealment of income or the non furnishing of the return : that was the only limitation imposed thereunder (ii) that the notice originally issued during the pendency of the proceedings was with regard to the imposition of penalty and the notice that was issued later on July 12, 1956, was one which gave an opportunity to the assessee to appear and show cause why penalty should not be imposed ; (iii) that, therefore, the Income tax Officer had jurisdiction to issue the notice. Banarsi Das v. Commissioner of Income tax (1936) 4 I T R 217; Commissioner of Income tax v. Sheik Abdul Kadir A I R 1928 Mad. 257 ; Guru Prosad Shaw v. Commissioner of Income tax (1944) 12 I T R 233 ; Jos Chacko Pooihkaran v. Income tax Officer, Ernakulam Circle (1957) 32 I T R 648 ; Sivagaminatha Moopanar &…

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