2002 (8) TMI 37

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....the law for the levy of the penalty is as it stood on the date when the penalty was imposed, that is as amended with effect from April 1, 1976. That question is required to be answered against the assessee, and in favour of the Revenue in the light of the law laid down by the Supreme Court in the case of CIT v. Smt. R. Sharadamma [1996] 219 ITR 671, wherein, the apex court held that the Inspecting Assistant Commissioner does not lose the jurisdiction to continue with the proceedings pending before him on March 31, 1976, by virtue of the deletion of sub-section (2) of section 274 by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976. The court held that: "He was entitled to continue with those proceedings and pass appr....

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....d be levied on the assessee. As a matter of fact, the language of clauses (i), (ii) and (iii) are such as there could be no case in which penalty could be levied where no tax is payable by the assessee since the quantification of the penalty is totally dependent upon the tax payable by the assessee...Therefore, the conclusion is irresistible that when an assessee is not liable to pay any tax, no penalty can be levied on the said assessee." In the case of CIT v. C.R. Niranjan [1991] 187 ITR 280, this court held that penalty is not exigible on loss. A similar view was taken by the Punjab and Haryana High Court in the case of CIT v. Prithipal Singh and Co. [1990] 183 ITR 69, 71, wherein, the court held that: "Penalty imposed is paid in addit....