Penalty jurisdiction under section 271(1)(c) depends on the date of reference, not initiation of proceedings.

Jurisdiction of the Inspecting Assistant Commissioner to levy penalty under section 271(1)(c) turned on the date the Income-tax Officer made the reference, not the date when penalty proceedings were first initiated. The reference date was decisive because jurisdiction after deletion of section 274(2) survived only where the reference had been made before 1 April 1976 and remained pending on that date. On that test, the Tribunal was not justified in deciding jurisdiction by reference to initiation of proceedings, and the Revenue's position was accepted.

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Issues: Whether the Inspecting Assistant Commissioner's jurisdiction to levy penalty under section 271(1)(c) was to be determined with reference to the date of initiation of penalty proceedings by the Income-tax Officer or the date of reference made to the Inspecting Assistant Commissioner.

Analysis: The governing test is the date on which the Income-tax Officer made the reference to the Inspecting Assistant Commissioner, not the date on which penalty proceedings were initiated. Jurisdiction would survive after the deletion of section 274(2) only if the reference had been made before 1 April 1976 and was pending on that date. Since the Tribunal did not apply this test, its decision on jurisdiction could not stand.

Conclusion: The answer was returned in favour of the Revenue. The Tribunal was held not justified in deciding the jurisdictional question by reference to the date of initiation of penalty proceedings instead of the date of reference.

Ratio Decidendi: Jurisdiction to impose penalty by the Inspecting Assistant Commissioner depended on the date of reference made by the Income-tax Officer, and not on the date when penalty proceedings were initiated.

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