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TMI Blog1975 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... not acceptable. He also pointed out that but for this credit entry there would have been a deficit cash balance on April 24, 1969. On these grounds, he held that the credit entry was a bogus entry and the sum of Rs. 4,000 represented the assessee's income from undisclosed sources. He, accordingly, included this amount in the total income of the petitioner and initiated proceedings under section 271(1)(c) of the Income-tax Act. There is no dispute that the assessment order had now become final. In the penalty proceedings under section 271(1)(c), the petitioner was called upon by a notice to make such representations as he may like and produce such other evidence as he may have. The petitioner filed an objection to these proceedings in which he had taken a legal plea that the mere fact that the assessee was not able to prove the genuineness of the credit entry in the assessment proceedings, did not attract the provision of section 271(1)(c). He also relied upon a decision of the Supreme Court in Commissioner of Income-tax v. Anwar Ali and contended that the burden is on the department to prove the deliberate concealment of the assessee and the Income-tax Officer merely on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the petitioner at the time of his argument confined himself to the question of jurisdiction of the Income-tax Officer to make the order under section 271(1)(c) in view of the provisions of section 274(2). According to the learned counsel, the Income-tax Officer had no jurisdiction to deal with the penalty proceedings under section 274(2). The learned counsel for the revenue, on the other hand, relied on the amendment of section 274(2) by Act 42 of 1970 and contended that under the provision, as amended, the Income-tax Officer alone had the jurisdiction to deal with the case. Section 274(2), before it was amended by Act 42 of 1970, read as follows : " 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. " According to the learned counsel for the petitioner, since the penalty proceedings was with reference to the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but covered by an authority in Commissioner of Gift-tax v. C. Muthukumaraswamy Mudaliar (T.C. No. 242 of 1968). In this case a Division Bench of this court, to which one of us was a party, had to consider a similar question arising under the Gift-tax Act, 1958. In that case, the facts were as follows : The assessee made a gift of certain properties on July 14, 1961. Though a return in respect of that gift was due on June 20, 1962, the return was actually filed on October 22, 1963. The Gift-tax Officer completed the gift-tax assessment on March 31, 1964. He initiated penalty proceedings under section 17(1)(a) of the Gift-tax Act on the ground that the assessee had no reasonable cause for not filing the return within the time allowed under the Act and, ultimately, levied a penalty of Rs. 2,605. In an appeal filed by the assessee before the Appellate Assistant Commissioner, the penalty was reduced to Rs. 1,000. Thereafter, the revenue preferred an appeal to the Tribunal and contended that the Appellate Assistant Commissioner erred in reducing the penalty levied under section 17(1)(a) by the Gift-tax Officer, which was the minimum leviable under the Act. The Tribunal rejected the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reference to the law prevailing on the date when the act of concealment was committed and not when the penalty proceedings are initiated or completed. That was also the view expressed by the Punjab High Court in Commissioner of Income-tax v. Bhan Singh Boota Singh. In fact, we find a circular of the Board of Revenue dated July 6, 1968, referred to in that judgment, is also to the effect that with reference to an offence under section 271(1), the provision as amended in April, 1968, would apply only to a case where a return was filed after that date. We have, therefore, no doubt, that, to the instant case, the law that was in force on December 23, 1970, when the return was filed, is the one that would be applicable. Even so, the learned counsel for the revenue contended that section 274(2) and the amendment made by Act 42 of 1970 are procedural in nature and, therefore, the amendment would apply to all cases of infringements whether committed before or alter the amendment. In other words, the amendment was retrospective and would apply to even a case where the return was filed prior to the amendment. The learned counsel, in this connection, also relied on the marginal note sayi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this court in Commissioner of Gift-tax v. C. Muthukumaraswamy Mudaliar (T. C. No. 242 of 1968), where a similar provision was held not retroactive. We, therefore, hold that the provision of section 274(2) as it stood prior to its amendment on April 1, 1971, was the relevant provision that was applicable to the instant case. If that is so, it is not disputed that the Income-tax Officer had no jurisdiction in this case, and that, therefore, the impugned orders are liable to be set aside. Before parting with this case, we should also notice one other argument of the learned counsel for the revenue. He contended that neither before the Income-tax Officer nor before the revisional authority, the petitioner ever raised the question of jurisdiction and that, therefore, he shall not be permitted to raise that question, for the first time, in this writ petition. If it is put as a question of submitting to the jurisdiction, we are unable to agree with the learned counsel that by submitting to a jurisdiction the petitioner could confer any jurisdiction on an authority who had no jurisdiction at all. If it is merely put as an estoppel from raising that question, we are unable to accept t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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