1980 (2) TMI 8

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.... I.T. Act, 1961, and issued the relevant notice under s. 148 of the Act. In response to the said notice the assessee filed a return on March 11, 1970. In the aforesaid return under s. 148 of the Act, the assessee included Rs.12,500 as hundi loan but failed to prove its genuineness. The ITO, therefore, added Rs. 12,500 as the income of the assessee from undisclosed sources. This order was passed on 12th March, 1970. In the course of reassessment proceedings the ITO was also satisfied that the assessee had concealed the particulars of its income and, therefore, on March 12, 1970, he initiated penalty proceedings under s. 274 read with s. 271(1)(c) of the Act and referred the penalty proceedings on the same day to the IAC under s. 274(2)....

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....diction not vested in law being violative of the provisions of section 275 read with section 274(2) of the Act. " The Tribunal, at the instance of the revenue, has sent the following question to this court under s. 256(1) of the Act: " Whether, having regard to the Taxation Laws (Amendment) Act, 1970, the Tribunal was right in law in cancelling the levy, of penalty imposed under section 271(1)(c) read with section 274(2) and section 275 of the Income-tax Act, 1961 ?" In our opinion the Tribunal has not properly appreciated the relevant provisions of the Act. The ITO initiated proceedings for penalty on March 12, 1970, and referred the same to the IAC on the same day under s. 274(2) as it then stood. Under that section the IAC was c....