Penalty jurisdiction survives an appeal against assessment unless the Act expressly or impliedly withdraws that power.

Section 28 of the Indian Income-tax Act, 1922 was construed as expressly empowering the Income-tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal to levy penalty in appropriate proceedings. An appeal against the assessment does not, by itself, divest the Income-tax Officer of that jurisdiction, because assessment and penalty proceedings are ordinarily distinct and jurisdiction once conferred continues unless withdrawn by express words or necessary implication. The mere filing of an appeal therefore does not oust the officer's penalty power.

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Issues: Whether, under section 28 of the Indian Income-tax Act, 1922, the Income-tax Officer loses jurisdiction to impose penalty once an appeal against the assessment is filed before the Appellate Assistant Commissioner.

Analysis: The statutory language of section 28 was held to be clear and unambiguous. It expressly empowered the Income-tax Officer, the Appellate Assistant Commissioner, and the Appellate Tribunal to direct levy of penalty in the course of proceedings under the Act. The Court held that assessment proceedings and penalty proceedings are ordinarily distinct, and that a mere appeal against assessment does not by necessary implication divest the Income-tax Officer of the power already vested in him. The Court applied the principle that jurisdiction once conferred is not taken away except by express words or necessary implication, and found no such ouster in section 28. The scheme of the Act and the possibility of appellate authorities also imposing penalty did not alter the plain meaning of the provision.

Conclusion: The Income-tax Officer does not cease to have power to impose penalty merely because an appeal against the assessment has been filed before the Appellate Assistant Commissioner.

Ratio Decidendi: A statutory power to impose penalty continues unless the Act expressly or by necessary implication withdraws that power on the filing of an appeal against assessment.

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