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TMI Blog1984 (8) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... penalties for the assessment years 1969-70 and 1970-71, in view of the amendment to section 274(2) of the Income-tax Act, 1961 ? " For the income-tax assessment years 1969-70 and 1970-7-1, the ITO made certain enquiries and came to the conclusion that the assessee had concealed its income in the returns filed. Assessments for these two years were completed on March 18, 1972. On the same date, the ITO issued notices for both the assessment years requiring the assessee to show cause why penalty should not be levied for concealment of income. The assessee submitted an explanation asserting that no income was concealed. The explanation was rejected. The ITO determined the income concealed for the assessment year 1969-70 at Rs. 25,000 and at Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to levy the penalty was the ITO by virtue of the amendment that came into force on April 1, 1971. The Tribunal also found that the ITO did not make any reference to the IAC in the matter of levying the penalty acting under s. 274(2) of the I.T. Act, as was in force prior to 1971 and, therefore, the IAC had no jurisdiction at the relevant time. Relying on the decision of this court in Addl. CIT v. Dr. Khaja Khutabuddinkhan [1978] 114 ITR 905, the Tribunal held that the jurisdiction is not vested in the IAC to levy the penalty. In that view, the assessee's contention regarding lack of jurisdiction on the part of the ITO to pass the orders of penalty was rejected. The assessee applied for and obtained the present reference against the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITO and, consequently, the ITO was competent to pass the impugned orders. It is also represented that there was no reference to the IAC of Income-tax under s. 274(2) of the I.T. Act prior to April 1, 1971, when the amendment came into force with the result that the IAC was not seized of the matter in the present case in connection with the levy of the penalty. The learned counsel submits that the decision of the Supreme Court in Brij Mohan's case [1979] 120 ITR I has no application, except in the matter of quantification of penalty. According to the learned counsel, the question regarding the authority who should levy the penalty has to be determined with reference to the law prevailing at the time when the jurisdiction to levy penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted when the returns were filed or the law that is prevailing on the date when the jurisdiction was assumed to levy the penalty by initiating penalty proceedings. The decision of the Supreme Court in Brij Mohan's case [1979] 120 ITR I that the crucial date for the purpose of application of law in matters of levy of penalty for concealment is the date when the offence is committed, is applicable in the matter of computation of penalties. The question before the Supreme Court arose in the context whether the penalty could be computed with reference to the law in existence at the time when the offence is committed and it is that principle that was accepted by the Supreme Court in Brij Mohan's case [1979] 120 ITR 1. The question for considera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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