1978 (1) TMI 70 - HC - Income Tax

Summary

Issues: Jurisdiction of Inspecting Assistant Commissioner to impose penalty under section 271(1)(c) of the Income-tax Act, 1961.

The judgment pertains to an application for a writ of certiorari seeking to quash a penalty imposed under section 271(1)(c) of the Income-tax Act of 1961 by the Inspecting Assistant Commissioner. The assessee, an advocate, had his income assessed at Rs. 14,300 for the assessment year 1970-71. The Inspecting Assistant Commissioner imposed a penalty of Rs. 12,000, which was challenged by the petitioner. The Tribunal held that the imposition of penalty was barred by limitation under the unamended section 275 of the Act, despite the department's reliance on the amended provision. The Tribunal considered penalty proceedings as quasi-criminal and applied the law in force at the time of initiation, leading to the penalty being vacated.

The High Court addressed the jurisdiction of the Inspecting Assistant Commissioner to impose the penalty. The petitioner contended that post the amendment of section 274(2) effective from April 1, 1971, the Inspecting Assistant Commissioner lacked jurisdiction to impose a penalty unless the difference between the returned and assessed figures exceeded Rs. 25,000. The court referred to a previous decision and held that the Inspecting Assistant Commissioner did not have the authority to impose a penalty in such cases. As no counter-affidavit was filed, the court relied on the previous decision and concluded that the Inspecting Assistant Commissioner had no jurisdiction to impose the penalty on the specified date. Consequently, the court granted the writ of certiorari, quashing the penalty order without any cost implications.