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TMI Blog1978 (7) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued. 3. In consequence of the penalty proceedings initiated by the ITO on or before 8th Dec., 1972, an order under s. 271 (1)(c) was passed by the ITO, Mandi, on 22nd March, 1975 imposing a penalty of Rs. 19,000 in relation to an addition of Rs. 18,115 which is stated to be the concealed income. At this stage, we like to record that neither before the ITO nor before the AAC any question of invoking provisions of the Explanation to s. 271(1)(c) arose and even before us for the Revenue, Miss R.K. Chahal who appeared, did not contend that the Explanation to s. 271 (1)(c) supported the levy of penalty in the present case. 4. For the assessee S/Shri D.S. Gupta and Ravinder Gupta appeared but addressed no arguments as to whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 1st day April, 1971 were concerned, if any penalty proceedings under s. 271(1)(c) emanated from those returns such proceedings could be processed only by the I.A.C. in cases where minimum penalty imposable exceeded Rs. 1000. 7. It was then urged that the Supreme Court judgment in the case of Jain Brothers vs. Union of India(2), did not apply to the present case. The ratio in that judgment was claimed to be entirely different. The point attempted to be made was that Jain Brother's case did not deal with the provisions of s. 274(2). The assessee's advocate, though invited our attention to the Orissa High Court judgment in the case of CIT vs. Dhadi Sahu,(3) in which it has been held that when penalty proceedings under s. 271(1)(c) r/w s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment was as such finalised after 1st day of April, 1971 argued, she that the assessee cannot succeed on his arguments which were legally unsound. 9. Miss Chahal contended that it is wrong and fallacious that s. 274 us but a charging one. She also referred to the Supreme Court judgement in the case of Jain Bros.(2) for her pleadings that the ITO rightly assumed was framed by him on 22nd Feb., 1972. 10. After hearing the parties, in our opinion, the Supreme Court judgment in Jain Bros.(2) case does not help the Revenue in support of the argument that once the assessment came to be completed on 22nd Feb., 72, it was on that date that the question of jurisdiction could only be determined. What the Supreme Court has held in the noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5), in this connection. In addition, the following authorities can be referred to for the same purpose: (i) CIT vs. Ramchand Kundan Lal Saraf(6). (ii) CIT vs. Data Ram Satpal(4). 11. For the Revenue, it was not contested that for purposes of levying penalty the law as on the date of filing the return should be applied. The argument, however, was that only the substantive law relating to the levy of penalty on the date of filing the return should be applied and not procedural law. Therefore, the question to be decided by us is whether it can be termed as only procedural as to who was the competent authority to process and levy penalty in the present case. Though we are not inclined to accept the argument for the assessee that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of return filed on Dec., 22, 1970, the assessing officer had no jurisdiction to levy penalty. 13. We have already noted that the Supreme Court judgment in Jain Bros.(2). case does not cover the dispute before us. Therefore, there can be two lines of cases: one covered by the principle laid down by the Madras High Court judgment in the case of Continental Commercial Corpn. vs. ITO(1) and the other by the Orissa High Court in the case of CIT vs. Dhadi Sahu(3). Admittedly, the principle as enunciated by the Madras High Court supports the assessee's view that the amendment of s. 274(2) by the Taxation Laws (Amendment) Act 1970 w.e.f. 1st day of April, 1971 did not clothe an assessing officer to process and levy penalty exceeding Rs. 1,000 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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