Penalty jurisdiction turned on the date of reference, not earlier penalty proceedings, under the Income-tax Act.

The Inspecting Assistant Commissioner's jurisdiction to impose penalty under section 271(1)(c) depended on the date of the Income-tax Officer's reference, not merely on when penalty proceedings began. A reference made before 1 April 1976 preserved jurisdiction to decide the reference and impose penalty, while a reference made after that date did not, even if earlier steps in the penalty process had already occurred. The Tribunal had not applied this date-of-reference test correctly, and the matter was remitted for fresh decision on that basis.

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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, and whether such jurisdiction depended on the date on which the Income-tax Officer referred the matter to him before or after the deletion of section 274(2).

Analysis: The controlling factor for the Inspecting Assistant Commissioner's jurisdiction is the date of reference by the Income-tax Officer. If the reference was made before 1 April 1976, jurisdiction existed to decide the reference and impose penalty. If the reference itself was made after 1 April 1976, jurisdiction was absent, even though penalty proceedings may have been initiated earlier. The Tribunal had not decided the matter on this correct basis.

Conclusion: The answer was in favour of the Revenue to the extent that jurisdiction had to be determined only on the basis of the date of reference, and the matter was sent back to the Tribunal for fresh decision on that basis.

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