TaxTMI 
TaxTMI 
1993 (8) TMI 1
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....nt), the following question ( (1982) 136 ITR 734) : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the Income-tax Officer had no jurisdiction to levy the penalty and that he should have referred the case to the Inspecting Assistant Commissioner for imposition of penalty ?" The reference pertained to the assessment year 1968-69, the relevant accounting period having ended on March 31, 1968. The assessee filed his return on April 16, 1970. With effect from April 1, 1971, sub-section (2) of section 274 of the Income-tax Act, 1961, was amended. Prior to the said amendment where, in a case falling under clause (iii) of sub-section (1) of section 271, the minimum p....
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....dment had no application to the case because it had not been made expressly retrospective. Arising out of the order of the Tribunal, the question quoted above was referred to the High Court. The High Court noted that the question to be considered was whether the proceedings for imposition of penalty taken in the case were governed by the provisions of section 274(2) as they stood prior to the said amendment or whether it was the sub-section as amended that would apply. It concluded that the competence or jurisdiction of the authority to initiate the penalty proceedings could be governed only by the law which was in force on the date of initiation of such proceedings. A combined reading of section 271(1)(c)(iii) and section 274(2) provided ....
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.... Assistant Commissioner who shall, for the purpose, have all the powers conferred under this Chapter for the imposition of penalty." After the said amendment, it read thus : "Notwithstanding anything contained in clause (iii) of sub-section (1) of section 271, if in a case falling under clause (c) of that sub-section, the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished exceeds a sum of twenty-five thousand rupees, the Income-tax Officer shall refer the case to the Inspecting Assistant Commissioner who shall, for the purpose, have all the powers conferred under this Chapter for the imposition of penalty." Learned ....
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.... satisfaction was reached, the order imposing the penalty had to be made only after the completion of the assessment. The crucial date, therefore, for purposes of penalty, was the date of such completion. In D. M. Manasvi v. CIT [1972] 86 ITR 557 (SC), this was reiterated. Counsel for the Revenue laid great stress upon the judgment of this court in CIT v. Dhadi Sahu [1993] 199 ITR 610. In this case, the assessee had failed to disclose certain income falling to the share of his minor children for the assessment years 1968-69 and 1969-70. The Income-tax Officer passed assessment orders on February 28, 1970, and initiated penalty proceedings under section 271(1)(c). Since the amounts of the penalty to be imposed would exceed Rs. 1,000, the Inc....
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....sistant Commissioner continued to have jurisdiction to impose penalty. The previous operation of section 274(2) as it stood before April 1, 1971, and anything done thereunder continued to have effect under section 6(b) of the General Clauses Act, 1897, enabling the Inspecting Assistant Commissioner to pass orders imposing penalty in pending references. What was material was the date on which the references were initiated. If the references had been made before April 1, 1971, they would be governed by section 274(2) as it stood before that date and the Inspecting Assistant Commissioner had jurisdiction to pass the orders of penalty. Learned counsel for the Revenue submitted that the Income-tax Officer had, in the instant case, satisfied him....