Penalty jurisdiction under the Wealth-tax Act shifted after amendment, leaving the Inspecting Assistant Commissioner without power to impose penalty.

The amended section 18(3) of the Wealth-tax Act removed the Inspecting Assistant Commissioner's jurisdiction to impose penalty and vested that power in the Wealth-tax Officer, subject to the prescribed approval. Following the binding Allahabad HC decision in CIT v. Om Sons, contrary views of other High Courts did not alter that position. The reference was therefore answered in favour of the assessee, holding that the Inspecting Assistant Commissioner lacked jurisdiction to impose penalty on the relevant date.

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Issues: Whether, on the relevant date, the Inspecting Assistant Commissioner had jurisdiction to impose penalty under the Wealth-tax Act, 1957 after the amendment to section 18(3).

Analysis: The question was governed by the binding decision of the same High Court in CIT v. Om Sons, which held that the amended section 18(3) removed the Inspecting Assistant Commissioner's jurisdiction to impose the penalty and vested the power in the Wealth-tax Officer, subject to the prescribed approval. The contrary views of other High Courts did not displace the binding effect of that decision.

Conclusion: The answer was required to be given in favour of the assessee and against the Revenue.

Final Conclusion: The reference was answered by holding that the Inspecting Assistant Commissioner lacked jurisdiction to impose the penalty on the relevant date, and the assessee succeeded on the referred question.

Ratio Decidendi: Where the governing statutory amendment removes the penalty-imposing jurisdiction of one authority and vests it in another, the former authority cannot validly impose penalty after the amendment takes effect.

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