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Issues:
1. Imposition of penalty under section 271(1)(c) of the Act. 2. Appeal against the order of the CIT (A) confirming the penalty. 3. Jurisdiction of the IAC to impose penalty after a change in the law. 4. Right to appeal against the order of the IAC. Analysis: 1. The judgment deals with two appeals by the assessee challenging the imposition of a penalty under section 271(1)(c) of the Act and against the order of the CIT (A) confirming the penalty by the IAC. The facts revolve around a search conducted on the assessee's premises, leading to the conclusion by the ITO that the assessee had concealed income. The IAC issued a notice under section 274 read with section 271(1)(c) of the Act. The assessee contended that the dispute centered around the purity of ornaments and the valuation of assets. The IAC imposed a penalty of Rs. 80,000 based on the evidence and arguments presented. 2. The assessee filed appeals against the IAC's order, one before the Tribunal and another before the CIT (A). The CIT (A) dismissed the appeal, stating lack of jurisdiction. The Tribunal heard arguments from both parties, where the assessee claimed that the IAC had no jurisdiction to impose the penalty due to a change in the law. The Department's representative argued that the Tribunal also lacked jurisdiction to entertain appeals against the IAC's penalty orders. The assessee cited various judgments and legal principles to support their claim of a vested right to appeal against the IAC's order. 3. The Tribunal analyzed the timeline of events and the legal provisions to determine the jurisdictional issue. The assessment order was passed before the change in the law, indicating that the basis for the penalty arose prior to the legal amendment. Citing Supreme Court decisions, the Tribunal held that the right to appeal against the IAC's order vested in the assessee before the law change, entitling them to challenge the penalty imposed. The Tribunal concluded that the penalty imposed by the IAC was liable to be canceled based on the legal principles and precedents discussed. 4. The Department's representative argued that the lis arises only when a notice under section 274(2) by the IAC is issued, citing relevant authorities. However, the Tribunal found no merit in this argument, stating that the authorities cited were not applicable to the current case. Consequently, the Tribunal canceled the penalty imposed, allowed one appeal, and dismissed the other as infructuous, based on the legal analysis regarding the jurisdictional issue. The decision on the preliminary legal issue rendered the consideration of the matter on merit unnecessary.
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