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Jurisdiction of Inspecting Assistant Commissioner to impose penalty post-amendment under Income-tax Act, 1961. Analysis: The judgment pertains to a reference made by the Income-tax Appellate Tribunal regarding the imposition of a penalty by the Inspecting Assistant Commissioner. The Tribunal found that the Inspecting Assistant Commissioner did not have jurisdiction to impose the penalty post-amendment to the Act. The Tribunal considered various amounts for penalty imposition, including income from property, unexplained credits, advances, and unaccounted purchase of copra. It concluded that while penalty was justifiable for some amounts, the Inspecting Assistant Commissioner lacked jurisdiction overall. The Tribunal relied on a Full Bench decision and cancelled the penalty. The Division Bench later reviewed the case in light of subsequent decisions by the apex court. It was argued that the Inspecting Assistant Commissioner retained jurisdiction despite the amendment to the Act. The Division Bench acknowledged the changing legal landscape but emphasized the importance of vested rights in forum selection. It referred to past judgments highlighting the crystallization of appeal rights upon initiation of proceedings. The judgment discussed the implications of prior decisions, particularly in Issac's case, where it was held that the Inspecting Assistant Commissioner lost jurisdiction post-amendment. However, a subsequent apex court ruling in Sharadamma's case contradicted this, asserting that the Inspecting Assistant Commissioner retained jurisdiction over pending matters. The judgment also referenced the relevance of Syed Mohamed's case, which raised questions about the validity of references and initiation of proceedings. The Tribunal's acceptance of the Inspecting Assistant Commissioner's jurisdiction before the amendment was a crucial point of contention. The judgment highlighted the factual background and the parties' adherence to the accepted position regarding the timing of the reference. The Tribunal's decision was based on the premise that the initiation occurred before the jurisdictional change, impacting the subsequent penalty imposition. In conclusion, the judgment emphasized the importance of questions arising directly from the Tribunal's order. It outlined the criteria for determining such questions and noted that the specific issue of jurisdiction post-amendment was not a direct result of the Tribunal's order. Ultimately, the question of the Inspecting Assistant Commissioner's jurisdiction was answered in the negative, favoring the Revenue and opposing the assessee.
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