Jurisdiction to Impose Penalty under Income-tax Act Upheld by High Court

The High Court of Allahabad held that the Inspecting Assistant Commissioner had jurisdiction to impose a penalty under section 271(1)(c) of the Income-tax Act for the assessment year 1973-74. The court's decision was based on the interpretation of the Taxation Laws (Amendment) Act, 1975 and supported by the principle that amendments to penal provisions operate prospectively. Citing the apex court's decision in CIT v. Dhadi Sahu, the court ruled in favor of the Revenue, stating that the Inspecting Assistant Commissioner possessed the authority to levy the penalty.

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The High Court of Allahabad considered whether the Inspecting Assistant Commissioner had jurisdiction to impose a penalty under section 271(1)(c) of the Income-tax Act for the assessment year 1973-74. The Tribunal had referred this question to the court. The court ruled that the Inspecting Assistant Commissioner did have the jurisdiction to pass the penalty order, based on the interpretation of the Taxation Laws (Amendment) Act, 1975. The court's decision was influenced by a previous case law and the principle that amendments to penal provisions operate prospectively. The apex court's decision in CIT v. Dhadi Sahu supported the view that the Inspecting Assistant Commissioner had the power to impose the penalty. Therefore, the court answered the reference in the negative, in favor of the Revenue.

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