Law:

Section:

Section 274(2), read with sections 271(1)(c ) and 123, of the Income-tax Act, 1961 - Penalty -Procedure for imposition- Assessment year 1961-62 - After completing assessment, ITO initiated penalty proceedings under section 271(1)(c) and referred same to IAC, Range IV - Thereafter case was transferred to another ITO and consequently, penalty proceedings were also transferred to IAC, Range V for disposal - Whether IAC, Range V to whom case was transferred was entitled to proceed with penalty proceedings and dispose of same after giving assessee a reasonable opportunity of being heard - Held, yes - Whether where, from facts and circumstances of case, it was clear that assessee was given reasonable opportunity of being heard but he did not avail of opportunity given, he was entitled to contend later before Tribunal that reasonable opportunity was denied - Held, no FACTS The ITO completed the assessment of the assessee-firm which included suppressed income and thereby initiated penalty proceedings under section 271(1)(c). As the quantum of penalty exceeded his limit, the ITO referred penalty proceedings to the IAC, Range Iv. Thereafter, the jurisdiction and the file of the assessee was transferred to another ITO and, consequently, the penalty proceedings were also transferred to the IAC, Range V for disposal. The IAC, Range V thereafter imposed penalty as he was satisfied that the assessee had concealed income deliberately and wilfully. The assessee preferred an appeal before Tribunal and challenged the jurisdiction of IAC, Range V to levy penalty. The Tribunal accepted the contention of the assessee. Before the Tribunal, the assessee had also raised a plea that it was not allowed reasonable opportunity of being heard before imposition of penalty. The grievance of the assessee related to obtaining of certified copies of statement and inspection of books of account impounded by the ITO. On this aspect, me IAC had stated mat the assessee had been informed by him that he was at liberty to inspect the books and documents. The hearing was adjourned from time to time to enable the assessee to obtain inspection of records and get certified copies of documents, and when the…

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