Penalty jurisdiction under income-tax law turns on the date proceedings begin, not the return filing date.

Jurisdiction to impose penalty under section 271(1)(c) was held to depend on the law in force on the date penalty proceedings are initiated, not the date of filing of the return. On that principle, the amendment to section 274(2) by the Taxation Laws (Amendment) Act, 1975 did not divest the Inspecting Assistant Commissioner of authority where proceedings had already been initiated under the then-applicable law. The penalty authority therefore retained jurisdiction, and the issue was answered in favour of the Revenue.

---

---

Issues: Whether the authority competent to impose penalty under section 271(1)(c) of the Income-tax Act, 1961 had to be determined with reference to the date of filing of the return or the date of initiation of penalty proceedings after the amendment to section 274(2) by the Taxation Laws (Amendment) Act, 1975.

Analysis: The reference turned on the material date for determining the jurisdiction of the penalty authority. The governing principle applied was that competence under section 271(1)(c) must be ascertained with reference to the law in force on the date when penalty proceedings are initiated, not the date on which the return was filed. Since the penalty proceedings in this case were initiated when section 274(2), as then in force, vested the power in the Inspecting Assistant Commissioner, the amendment did not divest that authority of jurisdiction in the present matter.

Conclusion: The authority had jurisdiction to impose the penalty, and the question was answered in the affirmative against the assessee and in favour of the Revenue.

---