Pending penalty proceedings preserved jurisdiction after statutory omission, so the Inspecting Assistant Commissioner could validly impose penalty.

Where penalty proceedings under section 271(1)(c) had already been referred to the Inspecting Assistant Commissioner before the omission of section 274(2) by the Taxation Laws (Amendment) Act, 1975, the omission did not divest him of jurisdiction. Once validly seized of the pending matter, he retained authority to complete the proceedings and pass the penalty order according to law. The referred question was answered in the negative, and jurisdiction to impose penalty was upheld in favour of the Department.

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Issues: Whether the Inspecting Assistant Commissioner retained jurisdiction to levy penalty under section 271(1)(c) of the Income-tax Act, 1961, after the omission of section 274(2) by the Taxation Laws (Amendment) Act, 1975, in respect of proceedings already referred to him.

Analysis: The penalty proceedings had been referred to the Inspecting Assistant Commissioner before the relevant amendment took effect. The omission of section 274(2) did not divest him of jurisdiction over proceedings already pending before him. Once validly seized of the matter, he continued to have authority to complete the proceedings and pass an order according to law.

Conclusion: The Inspecting Assistant Commissioner had jurisdiction to impose the penalty. The answer to the referred question is in the negative and in favour of the Department.

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