1978 (5) TMI 19

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....ound the assessee to have invested a sum of Rs. 22,000 in his capital account. He accepted the assessee's explanation to the extent of Rs. 12,000 and treated a sum of Rs. 10,000 as income from unexplained sources and directed initiation of penalty proceedings under s. 271(1)(c) of the Act by his order dated April 8, 1969. The records were transmitted to the IAC in terms of s. 274(2) of the Act. While the proceedings were pending, by the Taxation Laws (Amendment) Act of 1970, which came into force from April 1, 1971, the provision in s. 274(2) of the Act underwent an amendment. Prior to the amendment, sub-s. (2) of s. 274 read thus : " Notwithstanding anything contained in clause (iii) of sub-section (1) of section 271, if in a case falli....

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....ed on behalf of the assessee that the IAC had lost jurisdiction to deal with the penalty matter in view of the amendment with effect from April 1, 1971. In the meantime, in the case of CIT v. Dhadi Sahu [1976] 105 ITR 56 (Orissa), a Bench of this court came to hold (p. 62) : " If the Inspecting Assistant Commissioner had passed final orders prior to the Amending Act of 1970, there would have been no question of loss of jurisdiction, but as the matter was still pending and by change of procedure the references became incompetent, the Inspecting Assistant Commissioner had no jurisdiction to complete the proceedings, because he had no longer jurisdiction to deal with the matter of this type. " On the basis of the law indicated in the ....