Judgment :- Ramkumar, J. In this appeal filed by the assesses under Sec.260 A of the Income Tax Act, 1961 (hereinafter referred to as “the Act” for short), the following questions of law are raised: - “1) Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in not considering and discussing the case law relied on by the appellant (who was the respondent assesses before I.T.A.T.), at the time of final argument and whether such an order shall subsist? 2) Whether on the facts and in the circumstances of the case, whether the Tribunal was correct in law in remanding the penalty order back to the assessing officer to pass a fresh order under section 271 (1) © of the Income tax Act, 1961, after obtaining the approval of the Deputy Commissioner of Income tax and thereby extending the time limit for imposing penalty prescribed in section 275 of the Income tax Act, 1961 relying on the decision of Guduthur Bros V. C.I.T. (1960) 40 ITR 298), which order was passed with regard to the penalty imposed under section 28 (1) (a) of the Income tax Act, 1922, where no time limit for imposition of penalty was prescribed in the Income tax Act, 1922”? 3) Whether on the facts and in the circumstances of the case the Tribunal was correct in law in holding that the decision of Guduthur Bros VS. I.T.O. (1960 40 ITR 298) involving the penalty order imposed under 1922 Act is still a good law for penalties imposed in 1961 Act which prescribes definite time limit under Section 275?” 2. We heard Advocate Sri. S. Gopakumaran Nair, the learned counsel appearing for the appellant and Sr. Advocate Sri. P.K. Raveendranatha Menon, the learned counsel who represented the Revenue. 3. The assesses derives income from a partnership firm namely M/s. Das wines and liquors and also income from his proprietary business as a Government Contractor besides income from other sources. Even though he had filed separate returns showing separate permanent account numbers for different sources of income, he had not declared his income from the aforementioned partnership business for the assessment year 1985-86. The assessing officer, therefore, initiated penalty proceedings under sec. 271 (1) (c) of the Act for furnishing inaccurate particulars of his income. Even though he had filed separate returns showing separate permanent account numbers for different sources of income, he had not declared his income from the aforementioned partnership business for the assessment year 1985-86. The assessing officer, therefore, initiated penalty proceedings under sec. 271 (1) (c) of the Act for furnishing inaccurate particulars of his income. Since the explanation offered by the assessee was not acceptable, the assessing officer imposed penalty of Rs.1,18,052/-. The assessee filed an appeal before the commissioner of Income-tax (Appeals), Trivandrum. As per Annexure IV order dated 8-5-1991 the commissioner allowed the appeal by canceling the penalty order for the reason that the assessee officer had not taken prior approval of the Range Deputy Commissioner before passing the penalty orders enjoined by Sec. 274 (2) (b) of the Act. An appeal preferred by the revenue before the Income tax Appellate Tribunal, Cochin Bench as I.T.A.506/Coch/92 was allowed and the matter was remanded to the Assessing Officer with a direction to pass fresh orders for obtaining the approval of the Deputy commissioner of Income Tax. It is the said order which is assailed in this appeal by the assessee. 4. Adv. Sri. S. Gopakumaran Nair, the learned counsel appearing for the appellant/assessee made the following submissions before us in support of the following submissions before us in support of the appeal:- There was a change in the Assessing officer during the course of the proceedings and the new incumbent who passed the penalty order did not hear the assessee. This was a clear violation of the principles of natural justice rendering the penalty order null and void. The commissioner of Income tax had rightly cancelled the penalty order and it was wrong on the part of the Tribunal in remanding the matter to the Assessing Authority with a direction to rectify the defect of non-compliance of Sec. 274 (2) (b) of the Act, particularly, after the bar of limitation under sec. 275 of the Act. Reliance placed on 40 ITR 298 rendered under the Income Tax act, 1922 (old Act) where there was no time limit, was misconceived. 5. After hearing both sides and after examining all the aspects of the matter, we are afraid that we find ourselves unable to accept the appellant’s contentions. 6. 275 of the Act. Reliance placed on 40 ITR 298 rendered under the Income Tax act, 1922 (old Act) where there was no time limit, was misconceived. 5. After hearing both sides and after examining all the aspects of the matter, we are afraid that we find ourselves unable to accept the appellant’s contentions. 6. In the first appeal filed by the assessee before the commissioner his main contention was that he had not concealed any income and that there was non-compliance of sec.274 (2) (b) of the Act. Violation of the principles of natural justice on the ground that the next incumbent in the office of the Assessing Officer did not hear the assessee before passing the penalty order was raised only at a belated Stage. Even assuming that a plea founded on violation of the principles of natural justice was raised before the commissioner, the said plea, even if entertained will not render the penalty order void ab initio precluding the assessing officer from proceeding afresh from the stage at which the violation of the principles of natural justice took place. Similarly, non-compliance of Sec.274 (2) (b) not obtaining the prior approval of the Deputy Commissioner would not also go to the root of the matter. It was only a curable defect. In 190 ITR 604 a Division Bench of this court placing reliance on 40 ITR 298 and other decisions observed as follows:- “Counsel for the Revenue submitted that the Tribunal was in error in simply affirming the orders passed by the Appellate Assistant Commissioner canceling the penalties without giving a consequential direction that the matter may be reconsidered by the assessing authority after affording notice and opportunity to the assessee. No question touching on the above aspect has been referred to us, but we should state that If an order passed by a statutory authority is held to be illegal or void for non-compliance with the principles of natural justice, the proceedings do not come to an end. They will stand restored to the stage before the order was passed. This position is well-settled in law –See Superintendent (Tech.I), Central Excise v. Pratap Rai (1978) 114 ITR 231; AIR 1978 SC 1244 and Guduthur bros. V. I.T.O. (1960) 40 ITR 298 (SC). We do not think that the Tribunal committed any error in not giving the consequential direction which is already the position in law. This position is well-settled in law –See Superintendent (Tech.I), Central Excise v. Pratap Rai (1978) 114 ITR 231; AIR 1978 SC 1244 and Guduthur bros. V. I.T.O. (1960) 40 ITR 298 (SC). We do not think that the Tribunal committed any error in not giving the consequential direction which is already the position in law. It needs no repetition”. (emphasis supplied) The above legal position was re-iterated by the Apex Court also in 130 STC 97 – Commissioner of sale Tax V. Subash and Co. as under: “19. Whenever an order is struck down as invalid being violation of principles of natural justice, there is no final decision of the case and, therefore, proceedings are left open. All that is done is that the order assailed by virtue of its inherent defect is vacated but the proceedings are not terminated. (See Guduthur Bros. V. Income-tax officer, Special Circle, Bangalore (1960) 40 ITR 298 (SC) and Superintendent (Tech.I), Central Excise, I.D.D., Jabalpur, v. Pratap Rai (1978) 114 ITR 231 (SC). In Commissioner of sales Tax, U.P. V. R.P. Dixit Saghidar (2001) 9 SCC 324, it was held as follows: “We are unable to subscribe to the view of the High Court. The aforementioned passage quoted from the Tribunal’s order shows that the Tribunal was of the view that once the order is quashed by the Assistant Commissioner, he could not in law remand the case for a decision afresh. As has been noted, before the Assistant Commissioner the counsel for the respondent had contended that the exparte order should have been set aside because no notice had been received. When principles of natural justice are stated to have been violated it is open to the appellate authority, in appropriate cases, to set aside the order and require the assessing officer to decide the cases de novo. This is precisely what was directed by the Assistant commissioner and the Tribunal, in our opinion, was clearly in error in taking a contrary view”. 7. Equally misconceived is the appellant’s argument that the Tribunal ought to have confirmed the appellate authority’s order canceling the penalty proceeding for the non-compliance sec.274 (2) (b) of the Act and that the Tribunal should not have remitted the matter for initiating proceedings de novo. The fallacy of this argument is that it stems from a misconception that the remand is for initiating fresh proceedings. The fallacy of this argument is that it stems from a misconception that the remand is for initiating fresh proceedings. The remand was for the purpose of enabling the assessing authority to comply with Sec.274 (2) (b) before passing a penalty order under Sec.274 (2) (b) before passing a penalty order under Sec.271 (1) (c) of the Act. It is pertinent to note that the bar under Sec.274 (1) for the non-compliance of Sec. 274 (2) (b) is not against the initiation of penalty proceedings only but against the passing of an order imposing a penalty. Sub Sections (1) (2) Sec.274 of the Act read as follows: “275.(1) no order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. (2) No order imposing a penalty under this Chapter shall be made – (a) By the Income-tax officer, where the penalty exceeds ten thousand rupees; (b) By the Assistant Commissioner (or Deputy Commissioner) Where the penalty exceeds twenty thousand rupees, except with the prior approval of the joint Commissioner.” This aspect of the matter was pointedly considered by the Karnataka High court in 243 ITR 674 – Gayathri Textiles v. Commissioner of Income Tax (Kar.) Wherein in it was observed as follows:- “The proceedings in the present matter were also validly initiated. The proceedings under section 271 (1) (c) (iii) only require prior approval of the Inspecting Assistant Commissioner for direction for payment of penalty and not for initiation of proceedings. It was a procedural defect and as such we are of the view that the Tribunal was right in holding that failure to obtain the previous permission from the Inspecting Assistant Commissioner of Income-tax for imposing the penalty under section 271 (1) (c) is only a procedural error and it is not fatal to the order of penalty passed under section 271 (1) (c) of the I.T. Act, 1961; and the tribunal was right in remanding the matter to the income-tax officer to pass fresh penalty order. The reference is answered in favour of the Revenue and against the assessee.” 8. The bar of limitation under Sec.275 of the Act is also not against the initiation of proceedings but only against the passing of an order imposing a penalty. The reference is answered in favour of the Revenue and against the assessee.” 8. The bar of limitation under Sec.275 of the Act is also not against the initiation of proceedings but only against the passing of an order imposing a penalty. Here the proceedings have already been initiated within the period of limitation and the assessee has no grievance in that regard. The remit was not for initiating fresh proceedings but to complete the proceedings already initiated, after curing the defect. We, therefore, see no reason to interfere with the order of the tribunal. This Appeal which is devoid of any merit is accordingly dismissed and the question of law raised in the appeal is answered against the appellant and in favour of the Revenue.