Judgment:
A.R. Tiwari, J.
1. The applicant (Commissioner of Income-tax, Bhopal), has filed these six reference applications as noted above, proposing three common questions of law under Section 256(2) of the Income-tax Act, 1961 (for short, 'the Act'), to state the case and refer the questions of law as extracted below, arising out of the order dated October 30, 1990, passed by the Tribunal in the appeals ;
'(i) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has not misdirected itself in ignoring the show-cause notice served under Section 274 of the Income-tax Act/10 of C. D. Act by merely relying on the service of subsequent notice ?
(ii) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in cancelling the penalty instead of remitting it back to the Assessing Officer when the statutory notices were validly served and adequate opportunity was given to the assessee ?
(iii) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in coming to the conclusion that reasonable opportunity was not given to the assessee merely on the basis of the second notice ?'
2. The facts lie in a narrow compass.
3. The non-applicant (assessee) filed a return late as a result of which penalty was levied under Section 271(a) of the Act. No statement was filed as regards the payment of advance tax and as such penalty was also levied under Section 273(1)(b) of the Act. Anurag and Ramesh Malik presented inaccurate estimate and hence, penalty under Section 273(2)(a) was alsolevied. The aggrieved assessee eventually filed Appeals Nos. 735, 736, 737, 739 to 742, 790 to 795, 796, 797 and 798 and 799 for the assessment years 1979-80 to 1982-83. The Tribunal allowed the appeals. The applicant felt aggrieved by the decision and, therefore, filed the applications under Section 256(1) of the Act which were registered as Nos. 9, 10, 12, 13, 14, 15, 16, 17 and 18 to 21(Ind) of 1991 seeking reference of the questions. The Tribunal rejected the applications. The applicant, therefore, filed these reference applications under Section 256(2) of the Act. ,
4. On consent, these reference applications are taken up for final disposal.
5. We have heard Shri D.D. Vyas, learned counsel for the applicant in all these reference applications. None appeared for the non-applicants-assessees.
6. The Tribunal refused to refer the questions and held as under :
'Learned Departmental Representative stressed on the proposed question No. 4 that the order of the Tribunal is perverse. So placing reliance upon Fakhri Automobiles v. CIT 0043/1978 he argued that where the finding of the Tribunal is perverse, a question of law does arise for reference. There cannot be any quarrel with this proposition of law. But the learned Departmental Representative could not point out any perversity in the order of the Tribunal when it is mostly decided on legal principles. As stated above, all the findings of the Tribunal have not been questioned and, therefore, even otherwise the questions proposed are merely academic. That apart, as stated above, the questions do not arise out of the order of the Tribunal.
In the result, the applications are rejected.'
7. We notice that the order of the Tribunal is based on proper appreciation of evidence. The conclusion rests on firm foundation. The findings were not challenged before the Tribunal.
8. These findings of fact, not shown to be perverse or perishable, reached by the Tribunal did not give, as held in CIT v. Ashoka Marketing Ltd. : [1976]103ITR543(SC) and in CIT v. Kotrika Venkataswamy and Son's : [1971]79ITR499(SC) , rise to a question of law and as such the Tribunal rightly rejected the reference application. Recourse to Section 256(2) of the Income-tax Act is thus, not justified and is acarpous (CIT v. Orissa Corporation P. Ltd. : [1986]159ITR78(SC) ).
9. We find that the Tribunal did not misdirect itself and did not commit any error in cancelling the penalty and in refusing the order of remittal of the matter. We also find that the Tribunal was right in reaching theconclusion that reasonable opportunity was not given to the assessee. The issuance of the second notice itself manifested the infirmity in the proceedings (Nazir Ahmed v. King Emperor AIR 1956 PC 257) is pertinent.
10. In the result, we arc satisfied with the correctness of the view taken by the Tribunal and find that refusal of reference is justified. We arc thus satisfied that the proposed questions of law as noted above, do not arise out of the orders passed by the Tribunal and as such these reference applications should suffer the fate of dismissal.
11. Accordingly, we find that these reference applications are not worthy of being allowed. Consequently, we reject these applications with no order as to costs.
12. Counsel fee in each of the applications shall be Rs. 750, if certified.
13. The original order shall be retained in Miscellaneous Civil Case No. 397 of 1991 and a copy of the order shall be placed in the record on the other connected miscellaneous civil cases as noted above.