Law:

Section:

Section 271(1)(c), read with section 274(2) of the Income-tax Act, 1961 and article 226 of the Constitution - Penalty - For concealment of income - Assessment years 1959-60 to 1965-66 - In pursuance of search of petitioner's premises and seizure of account books, while investigation was going on, petitioner Tiled three petitions on three different dates for varying assessment years, for a reasonable settlement of its liability - Petitioner Tiled revised returns also on 30-7-1974 for assessment years 1959-60 to 1965-66 - While assessments were all pending, IAC(Central) on being vested with jurisdiction under section 125(1)(a) by Commissioner, completed those assessments and initiated penalty proceedings under section271(1)(c) - Whether, having regard to materials on record, impugned orders were justified and petitioner could not move writ Court for interference - Held, yes FACTS The CBI and the Enforcement Directorate raided the petitioner's business premises and seized all books of account and other records. While the matter was under investigation by the department, the petitioner filed one petition on 2-3-1964 for a reasonable settlement of its liability for 1959-60 to 1964-65. Another petition was made on 14-8-1968 for all the years beyond 1959-60 to 1968-69. The petitioner made yet another petition on 16-5-1974, for the assessment years 1959-60 to 1972-73. Thereafter, the petitioner filed revised returns for the assessment years 1959-60 to 1965-66 on 30-7-1974. Upon scrutiny, it was detected that the petitioner had furnished incorrect particulars. The IAC (Central) on being vested with jurisdiction under section 125(1)(a) by Commissioner, completed assessments and also passed the penalty orders under section 271(1)(c) and, consequently, the demand notice under section 156 was issued. On writ, the petitioner challenged the orders on the grounds that the ITO not having been satisfied in the course of assessment proceedings that the petitioner had concealed the particulars of income or famished inaccurate particulars of such income, initiated the proceedings and that the IAC had no competence, authority or Jurisdiction to exercise his power of imposition of…

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