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TMI Blog1979 (10) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... April 1, 1968 ? (2) Whether, on the facts and in the circumstances of the case, the order of the Inspecting Assistant Commissioner imposing penalty was bad in law for want of jurisdiction ? " The relevant assessment year is 1965-66. According to the assessee, he was an employee of the firm, U.P. Saw Mills, whereas, according to the department, the assessee was a partner in that firm. The assessee filed a return on 9th August, 1968, declaring an income by way of salary of Rs. 600 from the above firm. He filed another return on 12th August, 1968, declaring therein " nil " income. The assessment was made on 6th August, 1969, on an income of Rs. 11,700 on the finding that the assesee was a partner in the firm. The ITO initiated proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80] 121 ITR 373. It was held in that case, that the duty to disclose particulars of income arises when the assessee furnishes his return under s. 139(1) and if the assessee conceals the particulars of his income in that return he incurs the penalty under s. 271(1)(c) and the quantum of penalty must depend upon the law in force when the penalty is incurred. In the instant case, the assessee filed his return on 9th August, 1968. It is the substantive law existing on that date which would govern the quantum of penalty imposable on the assessee for concealment of particulars of income. Clause (iii) of s. 271(1), as amended by the Finance Act, 1968 (Act 19 of 1968), with effect from 1st April, 1968, was applicable to the case of the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty. (3) An Appellate Assistant Commissioner on making an order under this Chapter imposing a penalty, shall forthwith send a copy of the same to the Income-tax Officer." By s. 49 of the Taxation Laws (Amendment) Act, 1970, which came into force on 1st April, 1971, for the words " the minimum penalty imposable exceeds a sum of rupees one thousand " in s. 274(2), the words and brackets " the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished exceeds a sum of twenty-five thousand rupees " were substituted. As a result of the substitution made by s. 49 of the Amending Act, s. 274(2) reads as follows : " (2) N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into force of the Amending Act which amended s. 274(2). The learned counsel for the department submitted that although the order imposing penalty by the IAC was passed after the amending Act had come into force, yet if the reference made by the ITO was validly made before that date, the IAC continued to have jurisdiction to impose penalty and the order passed by him was valid. In other words, the argument is that the amendment brought about in s. 274(2) with effect from 1st April, 1971, was not applicable to pending references. The argument of the learned counsel for the assessee, on the other hand, is that even in a reference which was pending under s.274(2) on the date when the section stood amended, the IAC could not pass any order impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 29 did not deprive the Controller of his jurisdiction to try the suit pending before him on the date when the Amending Act came into force. It was pointed out that though the Amending Act did not contain any saving clause the savings contained in s. 8 of the Bengal General Clauses Act, 1899, corresponding to s. 6 of the Central Act applied and the transfer of the suit having been lawfully made under s. 29 of the Act, its deletion by the Amending Act did not affect its previous operation or anything duly done thereunder. Similarly, in, Mohd. Idris v. Sat Narain, AIR 1966 SC 1499, the question was whether the munsif who was trying a suit under the U.P. Agriculturists Relief Act ceased to have jurisdiction after the passing of the U.P. Zamin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re concealed did not exceed Rs. 25,000. This supports the inference that in pending references the IAC continued to have jurisdiction to impose penalty. There is yet another way of looking at the matter. The words " 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 " as they occur in s. 274(2) clearly signify that the jurisdiction of the IAC for the purpose of imposing penalty is derived on a reference made to him by the ITO. Therefore, what is important is to see whether the reference was validly made to the IAC under s. 274(2). If the reference was valid in accordance with the provisions of s. 274(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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