Penalty reference jurisdiction depends on concealment exceeding the statutory threshold in the assessment order.

Penalty reference under section 274(2) was invalid because the assessment order did not record concealment or furnishing of inaccurate particulars in respect of income exceeding the statutory threshold. The additions linked to concealment were below the limit, while the remaining additions were only expenditure disallowances and did not satisfy the condition for reference. As that prerequisite was not met, the Inspecting Assistant Commissioner lacked jurisdiction to impose the penalty, and cancellation of the penalty order was upheld.

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Issues: Whether the reference of the penalty matter to the Inspecting Assistant Commissioner under section 274(2) of the Income-tax Act, 1961 was valid when the income in respect of which concealment was found in the assessment order did not exceed the statutory threshold.

Analysis: The penalty was initiated under section 271(1)(c). The governing condition in section 274(2) required the Income-tax Officer, before making a reference, to determine in the assessment order that the concealed income or income for which inaccurate particulars were furnished exceeded twenty-five thousand rupees. On the figures recorded in the assessment order, the concealment-related additions were below that limit, while the remaining additions were merely disallowances of expenditure. The statutory prerequisite for reference was therefore not satisfied, and the Inspecting Assistant Commissioner lacked jurisdiction to impose the penalty.

Conclusion: The reference under section 274(2) was invalid, the penalty order was without jurisdiction, and the cancellation of the order was correct. The assessee succeeded.

Final Conclusion: The appeal succeeded on the jurisdictional ground and the penalty order did not survive.

Ratio Decidendi: A reference for penalty under section 274(2) is valid only when the assessment order records concealment or furnishing of inaccurate particulars in respect of income exceeding the statutory monetary threshold; otherwise, the higher authority has no jurisdiction to impose the penalty.

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