2000 (7) TMI 54

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....ight in law in cancelling the penalty of Rs. 55,000 imposed by the Inspecting Assistant Commissioner by his order dated March 31, 1979, as without jurisdiction and invalid in law, after the deletion of section 274(2) of the Income-tax Act by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976 ?" The factual position, which is almost undisputed, so far as relevant for the purpose of the adjudication, is as follows : For the assessment year 1973-74, before the completion of the assessment, by order dated September 24, 1976, notice was issued by the Assessing Officer under section 274 read with section 271(1)(c) of the Act on March 30, 1976, for alleged concealment of income by the assessee. Subsequently, since the penal....

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....y. (3) An Appellate Assistant Commissioner, on making an order under this Chapter imposing a penalty, shall forthwith send a copy of the same to the Income-tax Officer." As on 1st April, 1976 : "(1) No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. (3) An Appellate Assistant Commissioner, on making an order under this Chapter imposing a penalty, shall forthwith send a copy of the same to the Income-tax Officer." Learned counsel for the Revenue characterised the deletion as a change of forum and to be procedural and assailed the order of the Tribunal. There is no appearance on behalf of the assessee in spite of service of ....

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.... be initiated only after the assessment order has been made which finds such concealment or furnishing of inaccurate particulars. Which authority has the jurisdiction to impose penalty is what is relevant. In both Dhadi Sahu's case [1993] 199 ITR 610 (SC) and Varkey Chacko's case [1993] 203 ITR 885, the apex court considered the effect of the amendment introduced by the Taxation Laws (Amendment) Act, 1970, with effect from 1st April, 1971. The position from that date has been indicated supra. Before amendment it read as follows : "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 minimum penalty imposable exceeds a sum of rupees one thousan....