R.K.GULATI, J. - (1.) THIS is a reference under S. 27 (1) of the WT Act, 1957 (for short "the Act") at the instance of the CWT, Allahabad. The following question of law has been referred for the opinion of this Court: "Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the IAC had no jurisdiction to pass the order of penalty under S. 18(1)(c) of the WT Act, 1957 on or after 1st April, 1976, i.e., the date from which his power to impose the penalty under S. 18 (1)(c) of the WT Act, 1957 was taken away by the Taxation Laws (Amendment) Act, 1975 ?"
(2.) THIS reference relates to the asst. yrs. 1972-73 to 1974-75. Simultaneoulsy with the completion of assessments the WTO initiated proceedings under S. 18(a)(c) of the Act. He referred the matters to the IAC under S. 18 (3) as it stood at the relevant time. The assessee was subjected to penalty of varying amounts for all these years by the IAC by his three separate orders passed under S. 18 (1)(c)(iii) r/w sub-s. (3) of S. 18 of the Act. In appeal before the Tribunal the assessee took up a preliminary objection that the orders of penalty were without jurisdiction and, therefore, void ab initio, inasmuch as, on 28th Oct., 1977 the IAC was " competent authority" to pass the impugned penalty orders because of the amendment brought about in S. 18 of the Act. w.e.f. 1st April, 1976 by the Taxation Laws (Amendment) Act, 1975. The Tribunal upheld the preliminary objection and allowed the appeals of the assessee by deleting the penalties for all these years. It is in this background that the question, set out above, has been referred for the opinion of this Court. In CIT vs. Om Sons 1978 CTR (All) 407 : (1979) 116 ITR 215 (All) this Court had an occasion to consider somewhat similar controversy which arose under the corresponding provisions of IT Act, 1961. In that case the ITO had initiated proceedings under S. 271 (1)(c) of the IT Act and referred the matter of the IAC under sub-s. (2) of S. 274 of that Act. Before the penalty could be imposed by the IAC sub-s. (2) of S. 274 of the IT Act had been amended and the jurisdiction of the IAC to impose the penalty was taken away on the date when he passed the penalty orders. In such a situation, this Court held that a Court or Tribunal deciding a matter must not only be possessed of jurisdiction initially but also be clothed with the power to decide the matter when the final order is passed, Thus, on the date when the IAC passed the final order, his jurisdiction to do so had been taken away by the amendment in S. 274 (2) of the Act. In such situation, the order passed by him was held to be without jurisdiction. The principle enunciated in the case of Om Sons (supra) was followed and applied by this Court in cases, where the question for consideration was as to whether after omission of sub-s. (2) of S. 274 of the IT Act, 1961, w.e.f 1st April, 1976 by the Taxation Laws (Amendment) Act, 1975, the IAC was competent to pass the penalty orders in respect of the cases in which reference had been made to him by the ITO prior to 1st April, 1976. The view taken was that the IAC having lost the jurisdiction was not competent to pass any penalty order in such cases. In this connection we may refer to the decision of this Court in Ganesh Dass Ram Gopal vs. IAC & Anr. (1982) 28 CTR (All) 83 : (1983) 142 ITR 101 (All) and CIT vs. Lal Chand Jain (1989) 79 CTR (All) 76 : (1989) 180 ITR 448 (All). In the last mentioned case, it was held that by the amendment brought about by the Taxation Laws (Amendment) Act. 1975 the legislative intention was to destroy the continuance of the power of the IAC even in respect of the matters which had already been referred to him by the ITO prior to April, 1976 and the IAC had no jurisdiction to pass the penalty order under S. 271 (1)(c) of the IT Act on or after 1st April, 1976.
(3.) THE allied provisions of the IT Act referred to above, are analogous to the provisions under the WT Act, with which we are concerned in this reference. By the Taxation Laws (Amendment) Act, 1975, w.e.f 1st April, 1976, the IAC had ceased to the "competent authority" to pass any penalty order, after the said date with reference to the penalty imposable on an assessee under S. 18 (1) (c) of the Act. The rule of law laid down in the cases referred to hereinabove, is equally applicable to case in hand,;