Jurisdiction must exist on the date of final order; penalty order failed after amendment withdrew authority beforehand.

An adjudicating authority must possess jurisdiction when the final order is made, not merely when proceedings begin. Because the amendment effective from 1 April 1971 had withdrawn the Inspecting Assistant Commissioner's competence before the penalty order was passed on 9 February 1977, the penalty order was not legally sustainable and was held invalid in favour of the assessee.

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Issues: Whether the Inspecting Assistant Commissioner had jurisdiction to impose penalty after the amendment effective from 1 April 1971, when the penalty order was passed on 9 February 1977.

Analysis: The relevant assessment year was 1972-73 and the penalty proceedings arose under the provisions relating to concealment penalty and reference to the Inspecting Assistant Commissioner. The controlling principle applied was that the authority deciding the matter must possess jurisdiction not only when proceedings commence but also when the final order is made. Since the amended law had withdrawn the Inspecting Assistant Commissioner's jurisdiction before the penalty order was passed, the authority lacked competence to impose the penalty.

Conclusion: The question was answered in the affirmative in favour of the assessee and against the Department; the penalty order made by the Inspecting Assistant Commissioner was not legally sustainable.

Ratio Decidendi: An adjudicating authority must have jurisdiction on the date of the final order, and if an amendment withdraws that jurisdiction before the order is passed, the resulting order is invalid.

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