Jurisdiction to impose wealth-tax penalty ended after the 1976 amendment, invalidating post-amendment penalty orders.

Following the Taxation Laws (Amendment) Act, 1975, effective from 1 April 1976, the Inspecting Assistant Commissioner ceased to be the competent authority to impose penalty under section 18(1)(c) of the Wealth-tax Act, 1957. Applying the earlier binding decision on the same issue, the court treated penalty orders passed after that date as lacking jurisdictional support. The result was that penalty proceedings culminating in orders made in March 1977 could not be sustained by the Inspecting Assistant Commissioner.

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Issues: Whether, after the change brought about by the Taxation Laws (Amendment) Act, 1975 with effect from 1 April 1976, the Inspecting Assistant Commissioner retained jurisdiction to impose penalty under section 18(1)(c) of the Wealth-tax Act, 1957 in respect of penalty proceedings culminating in orders passed in March 1977.

Analysis: The question was answered by applying the earlier binding decision on the identical issue, which held that, on the altered statutory position, the Inspecting Assistant Commissioner had ceased to be the competent authority to impose penalty after the relevant change took effect. Since the penalty orders were passed after 1 April 1976, they lacked jurisdictional support.

Conclusion: The answer was given in favour of the assessee and against the Revenue. The Inspecting Assistant Commissioner had no jurisdiction to pass the penalty orders.

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