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Issues:
Imposition of penalty under s. 271(1)(c) read with s. 274(2) of the Income Tax Act, 1961 for the assessment year 1968-69. Jurisdiction of the Inspecting Assistant Commissioner (IAC) post-amendment in 1971. Validity of penalty imposition and reopening of concluded penalty proceedings. Analysis: The petitioner, an assessee, challenged the penalty of Rs. 10,000 imposed on him under s. 271(1)(c) read with s. 274(2) of the Income Tax Act for the assessment year 1968-69. The assessee had invested Rs. 22,000 in a registered firm, and the Income Tax Officer treated Rs. 10,000 as income from unexplained sources, initiating penalty proceedings. The case was referred to the Inspecting Assistant Commissioner (IAC) under s. 274(2) of the Act. However, an amendment in 1971 changed the threshold for referral to the IAC based on the amount of concealed income. The IAC imposed the penalty despite the amendment, leading to the assessee's appeal to the Income Tax Appellate Tribunal, which upheld the penalty. Subsequently, the assessee sought to challenge the jurisdiction of the IAC based on a 1970 amendment in a similar case. The High Court had earlier rejected an application related to the penalty imposition, stating no legal question arose. The assessee then approached the Tribunal under s. 154 of the Act, which also denied relief, prompting a writ application to quash the penalty imposition due to lack of jurisdiction. Citing a precedent, the High Court acknowledged that the penalty imposition was without jurisdiction based on the amendment. However, the court noted that the penalty proceedings had concluded years ago, and it would not be appropriate to reopen the matter now. The court emphasized that just because a different interpretation of the law was later established did not warrant reopening finalized matters. Ultimately, the court declined to interfere, emphasizing the importance of respecting finalized matters and rejecting the application without costs. In a concurring opinion, another judge agreed with the decision to decline interference in the penalty imposition matter. The judgment underscored the significance of upholding finality in legal proceedings and not revisiting matters based solely on subsequent legal interpretations.
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