Law: Income Tax Act, 1922

Section: 28(1)(c)

Section 271(1)(c) of the Income-tax Act, 1961 [Corresponding to section 28(1)(c) of the Indian Income-tax Act, 1922] - Penalty - For concealment of income - Assessment year 1942-43 - After hearing assessee and considering his written explanation penalty order under section 28(1)(c) was drafted by predecessor ITO and sanction of IAC was accorded - Successor ITO having looked into materials including written explanation filed by assessee, concurred with draft order of his predecessor and asked for sanction of IAC - After obtaining sanction he subscribed his signature to order and made it his own - Whether imposition of penalty by successor ITO without hearing assessee was legal - Held, yes Section 16 of the Excess Profits-tax Act, 1940 - Penalty - General - Assessment year 1942-43 - After hearing assessee and considering his written explanation penalty order under section 16 was drafted by predecessor ITO and sanction of IAC was accorded - Successor ITO having looked into materials, including written explanation filed by assessee, concerned with draft order of his predecessor and asked for sanction of IAC - After obtaining sanction he subscribed his signature to order and made it his own - Whether imposition of penalty by successor ITO, without hearing assessee, was legal - Held, yes FACTS The assessee was a proprietor concern. For the assessment year 1942-43, assessment made under section 23(4) was cancelled by AAC in appeal against order under section 27. While making the fresh assessment the ITO found that the assessee had concealed particulars of his income and show-cause notice was issued under section 28. After the assessment was reopened, two notices were issued, both dated 3-3-1947 calling upon the assessee to show cause by 10-3-1947, why a penalty under section 28 of the 1922 Act, and under section 16 of the Excess Profits Tax should not be imposed because the assessee had concealed the particulars of his income deliberately. After a number of adjournments, assessee filed a written statement denying the concealment and asking the penalty proceedings to be withdrawn. Before the ITO could pass an order under section 28 or section 16, he was transferred.…

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