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TMI Blog1993 (8) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... ate granted by the High Court of Kerala ( [1982] 136 ITR 733). The judgment under appeal was delivered on a reference under section 256(2) of the Income-tax Act, 1961. It answered in the negative, that is, against the appellant (assessee) and in favour of the Revenue (respondent), the following question ( (1982) 136 ITR 734) : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the Income-tax Officer had no jurisdiction to levy the penalty and that he should have referred the case to the Inspecting Assistant Commissioner for imposition of penalty ?" The reference pertained to the assessment year 1968-69, the relevant accounting period having ended on March 31, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich confirmed the order of the Appellate Assistant Commissioner. It held that the law governing the imposition of penalty for concealment of income was the law that was in force on the date on which the return in which the concealment had been made was filed and that the said amendment had no application to the case because it had not been made expressly retrospective. Arising out of the order of the Tribunal, the question quoted above was referred to the High Court. The High Court noted that the question to be considered was whether the proceedings for imposition of penalty taken in the case were governed by the provisions of section 274(2) as they stood prior to the said amendment or whether it was the sub-section as amended that would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus: "Notwithstanding anything contained in clause (iii) of sub-section (1) of section 271, if in a case falling under clause (c) of that sub-section, the minimum penalty imposable exceeds a sum of rupees one thousand, the Income-tax Officer shall refer the case to the Inspecting Assistant Commissioner who shall, for the purpose, have all the powers conferred under this Chapter for the imposition of penalty." After the said amendment, it read thus : "Notwithstanding anything contained in clause (iii) of sub-section (1) of section 271, if in a case falling under clause (c) of that sub-section, the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o this court's judgment in Jain Brothers' case [1970] 77 ITR 107. It was there held, inter alia, that it was the satisfaction of the income-tax authorities that a default had been committed by the assessee which attracted the provisions relating to penalty. Whatever the stage at which the satisfaction was reached, the order imposing the penalty had to be made only after the completion of the assessment. The crucial date, therefore, for purposes of penalty, was the date of such completion. In D. M. Manasvi v. CIT [1972] 86 ITR 557 (SC), this was reiterated. Counsel for the Revenue laid great stress upon the judgment of this court in CIT v. Dhadi Sahu [1993] 199 ITR 610. In this case, the assessee had failed to disclose certain income falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idly pending before the Inspecting Assistant Commissioner had to be returned without passing any final orders, if the amount of income in respect of which particulars had been concealed did not exceed Rs. 25,000. This supported the inference that, in a pending reference, the Inspecting Assistant Commissioner continued to have jurisdiction to impose penalty. The previous operation of section 274(2) as it stood before April 1, 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. What was material was the date on which the references were initiated. If the references had been made bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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