9911796707
|
Home
Issues: Jurisdiction to levy penalty under section 271(1)(c)(iii) of the IT Act, 1961 based on the amended provisions of section 274(2) - Applicability of procedural law to pending cases - Conflict between High Court decisions.
Analysis: The appeal pertains to a penalty of Rs. 15,360 imposed on the assessee for concealment of income under section 271(1)(c)(iii) of the IT Act, 1961. The assessee initially claimed that toria belonged to M/s. Kultar Singh & Bros., later changing the stance to belong to S. Geja Singh. The ITO treated the income as undisclosed and initiated penalty proceedings. The AAC upheld the penalty, leading to the appeal before the Tribunal. The crux of the legal objection raised by the assessee's counsel lies in the jurisdiction of the ITO to levy the penalty under section 274(2). The counsel argued that the amendment to section 274(2) increasing the ITO's jurisdiction to Rs. 25,000 was made after the return filing date, hence the ITO lacked competence to levy the penalty. The Revenue contended that procedural amendments apply to pending cases, citing decisions like Continental Commercial Corporation vs. ITO and CIT vs. Bhan Singh Boota Singh. The conflict between the decisions of different High Courts further complicates the matter. The Tribunal delved into the interpretation of section 274(2) and the application of procedural law to pending cases. Referring to the decisions of various High Courts, including Madras High Court and Punjab & Haryana High Court, the Tribunal concluded that the law prevailing at the time of the offense (concealment) governs. Relying on the decision of Punjab & Haryana High Court, the Tribunal held that the ITO lacked jurisdiction to levy the penalty, rendering the penalty proceedings void. Consequently, the Tribunal canceled the penalty without delving into the merits of the case. In light of the above analysis, the Tribunal allowed the appeal, emphasizing the importance of applying the law in force at the time of the offense in determining the jurisdiction to levy penalties under the IT Act, 1961.
|
