Penalty jurisdiction under section 271(1)(c) turns on when satisfaction is recorded, not when the order is later passed.

For penalty proceedings under section 271(1)(c), jurisdiction depends on the law in force when the Income-tax Officer records the requisite satisfaction that concealed income exceeded the statutory threshold. Once that satisfaction is recorded, the matter is treated as referred to the Inspecting Assistant Commissioner, and the later formal reference is only a ministerial act. The deletion of section 274(2) did not divest jurisdiction where the satisfaction had been recorded before 1 April 1976, so the authority retained power to impose the penalty.

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Issues: Whether the Inspecting Assistant Commissioner had jurisdiction to impose penalty under section 271(1)(c) of the Income-tax Act, 1961, in view of the deletion of section 274(2) of that Act.

Analysis: The operative point was the stage at which the Income-tax Officer recorded satisfaction that concealed income exceeded the statutory threshold. Once that satisfaction was recorded, the case was treated as referred to the Inspecting Assistant Commissioner, the formal reference being a ministerial act. Jurisdiction therefore had to be determined with reference to the law in force when the satisfaction was recorded, not the later date on which the penalty order was passed. Since the required satisfaction had been recorded before 1 April 1976, the deletion of section 274(2) did not divest the authority of jurisdiction.

Conclusion: The Inspecting Assistant Commissioner had jurisdiction to impose the penalty.

Ratio Decidendi: For penalty proceedings under section 271(1)(c), jurisdiction is determined by the law in force when the Income-tax Officer records the requisite satisfaction, and the subsequent formal reference does not alter that jurisdiction.

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