Penalty jurisdiction survives omission of section 274(2) when reference was made before the amendment took effect.

Where a penalty reference under section 274(2) of the Income-tax Act was made before that provision was omitted, the Inspecting Assistant Commissioner retained jurisdiction to complete the penalty proceedings under section 271(1)(c). Jurisdiction was treated as having vested when the concealment finding had already been recorded and the reference had been made before the amendment took effect, so the later omission of section 274(2) did not divest the authority of power to proceed. The legal position followed the court's earlier ruling on the same issue, and the answer was given in favour of the Revenue.

---

---

Issues: Whether the Inspecting Assistant Commissioner retained valid jurisdiction to impose penalty under section 271(1)(c) of the Income-tax Act, 1961, on a reference made under section 274(2) before its omission from the statute book.

Analysis: The reference for penalty was made on 25 November 1975, and the assessment finding concealment had already been recorded before the amendment took effect on 1 April 1976. Since jurisdiction had vested at the relevant time, the subsequent omission of section 274(2) did not divest the authority of power to proceed with and impose the penalty. The conclusion was supported by the court's earlier decision on the same legal position.

Conclusion: The question was answered in the affirmative. The Inspecting Assistant Commissioner had valid jurisdiction to impose the penalty, and the answer was in favour of the Revenue and against the assessee.

---