1975 (12) TMI 62

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....(1)(c) of the Income-tax Act, 1961, as barred by limitation by holding that the amendment to section 275 of the Act being operative from April 1, 1971, does not extend the period of limitation in respect of penalty proceedings initiated on December 31, 1970, pending for disposal as on April 1, 1971." Assessee is an advocate practising at Cuttack. In respect of the assessment year 1970-71, he filed a return disclosing art income of Rs. 3,933. His income was computed at Rs. 16,500. In appeal the total income was reduced to Rs. 14,300. A penalty proceeding was initiated under section 271(1)(c) of the Act by the Income-tax Officer on December 31, 1970, and was duly referred to the Inspecting Assistant Commissioner under section 274(2) of the....

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....away or abridge without express provision of the law. The law governing the period of limitation on the date of initiation of the penalty proceedings being two years from the date of framing of the assessment regardless of an appeal, the order of the Inspecting Assistant Commissioner is contrary to the provisions of the law, and, therefore, is cancelled..." Admittedly, the order of assessment in this case was passed on December 31, 1970. Section 275 before its amendment provided thus : " No order imposing a penalty under this Chapter shall be passed after the expiration of two years from the date of the completion of the proceedings in this course of which the proceedings for the imposition of penalty have been commenced." Before t....

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....e., April 1, 1971, the two year period provided under section 275 of the unamended Act had not expired. At that stage the new provision with effect from 1st April, 1971, introduced a new scheme of limitation. No right had accrued to the assessee when the law was changed. Therefore, the law as in force on the date when the order is made must be applicable. We have not been shown any decision contrary to such a view. On the other hand, Mr. Mohanty has accepted the analysis placed by us at the time of hearing that the real position is so. We would accordingly hold without feeling the need of referring to any authority to support our conclusion that the order of penalty does not suffer from the infirmity of limitation. Our answer to the questio....