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2018 (9) TMI 1470 - HC - Income TaxJurisdiction to impose penalty u/s 271(1)(c) - Inspecting Assistant Commissioner eligibility to pass orders - Held that - Till 01.04.1997, the Income Tax Officer had no jurisdiction to impose penalty, under Section 271(1)(c) of the Act if the minimum penalty impassable exceeded ₹ 1,000/- and in such a case he was bound to make a reference to the Inspecting Assistant Commissioner, who, on such reference exercise all the powers conferred under Chapter XXI for the imposition of penalty. From 01.04.1971, the Income Tax Officer could impose penalty under Section 271 (1)(c) if the amount of income in respect of which the particulars were concealed or inaccurate particulars were furnished did not exceed ₹ 25,000/-. If the amount of such income exceeded ₹ 25,000/- the Income Tax Officer was required to refer the case to the Inspecting Assistant Commissioner who then got jurisdiction to impose penalty. The amending Act did not make any provision that the references validly pending before the Inspecting Assistance Commissioner shall be returned without passing any final order if the amount of income in respect of which the particulars have been concealed did not exceed ₹ 25,000/-. The previous operation of Section 274(2) as it stood before 01.04.1971, and anything done thereunder continued to have effect under Section 6(b) of the General Clauses Act, 1897, enabling the Inspecting Assistant Commissioner to pass orders imposing penalty in pending references. Therefore, the Inspecting Assistant Commissioner to whom the case was referred prior to 01.04.1971 had jurisdiction to impose the penalty. Sub-Divisional Officer was empowered to initiate proceedings for illegal extraction of minerals under the provisions of Section 247(7) of the Code and the order which was impugned in the writ petition was passed by the Sub-Divisional Officer after amendment under Rule 53 of the Rules of 1996, which came into force w.e.f. 18.05.2017. Appeal dismissed.
Issues Involved
1. Applicability of amended procedural rules. 2. Vested rights in procedural law versus change of forum. 3. Jurisdiction and authority of the Sub-Divisional Officer. 4. Legal precedents regarding vested rights and procedural changes. Issue-wise Detailed Analysis 1. Applicability of Amended Procedural Rules The court addressed the applicability of amended procedural rules during the pendency of proceedings. It was noted that "if the new Act affects the matters of procedure only then, prima facie, it applies to all the actions pending as well as future." The petitioners argued for the disposal of their cases based on the rules in force at the time of inspection. However, the court held that "all pending cases of illegal extraction are to be disposed of as per procedure prescribed under the amended provisions of the law," emphasizing that no vested right exists in the procedure itself. 2. Vested Rights in Procedural Law Versus Change of Forum The petitioners contended that the change of forum from the Collector to the Sub-Divisional Officer constituted a vested right, citing the principle that "the forum of appeal or proceedings is a vested right." The court acknowledged this principle but clarified that the change of forum is a procedural matter. The court stated, "A change of forum (from the court of Collector to Sub-Divisional Officer) is a matter of procedure," and therefore, the amended rules would apply. 3. Jurisdiction and Authority of the Sub-Divisional Officer The court evaluated the jurisdiction and authority of the Sub-Divisional Officer under the amended Rule 53 of the M.P. Minor and Mineral Rules, 1996. It was held that "the Sub-Divisional Officer is competent to pass the impugned order," but the penalty imposed retrospectively based on the amended rules was quashed. The matter was remitted back to the Sub-Divisional Officer to reconsider and decide the penalty as per the rules prevailing at the time of inspection. 4. Legal Precedents Regarding Vested Rights and Procedural Changes The court referenced several legal precedents, including the case of Commissioner of Income Tax, Orissa vs. Dhadi Sahu, which established that "no litigant has any vested right in the matter of procedural law but where the question is of change of forum it ceases to be a question of procedure only." The court also cited the Himachal Pradesh State Electricity Regulatory Commission case, reinforcing that substantive rights are prospective unless explicitly stated otherwise. Conclusion The review petitions were dismissed, with the court concluding that the Sub-Divisional Officer had the jurisdiction to decide the matter under the amended provisions. The court emphasized that the procedural changes did not affect the vested rights of the petitioners, and the amended rules applied to the pending cases. The decision of the Apex Court in Commissioner of Income Tax, Orissa was found distinguishable based on the facts of the present case.
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