Pending penalty proceedings retained jurisdiction despite deletion of section 274(2), allowing completion by the Inspecting Assistant Commissioner.

Where penalty proceedings under section 271(1)(c) had already been initiated and were pending before the Inspecting Assistant Commissioner before the deletion of section 274(2) from 1 April 1976, the later statutory change did not divest him of jurisdiction. The controlling principle applied was that an authority already seized of the matter may complete pending proceedings despite the repeal or deletion of the enabling procedural provision. On that basis, the Inspecting Assistant Commissioner retained jurisdiction to impose the penalty, and the Tribunal was held unjustified in concluding otherwise.

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Issues: Whether the Inspecting Assistant Commissioner retained jurisdiction to impose penalty under section 271(1)(c) of the Income-tax Act, 1961, after the deletion of section 274(2), where penalty proceedings had been initiated and were pending before him prior to 1 April 1976.

Analysis: The penalty proceedings had been commenced by notice under section 274(2) read with section 271 before the deletion of section 274(2) with effect from 1 April 1976. The controlling principle applied was that where the Inspecting Assistant Commissioner was already seized of the proceedings before the statutory deletion, the subsequent change did not divest him of jurisdiction to complete the matter and impose penalty.

Conclusion: The Inspecting Assistant Commissioner had jurisdiction to impose the penalty in the present case, and the Tribunal was not justified in holding otherwise.

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