- (1.) ON an application under s. 256(1) of the IT Act the Tribunal has referred the following question for our opinion : "Whether, on the facts and in the circumstances of the case the Tribunal was justified in cancelling the penalty order passed under s. 271(1)(c) of the IT Act, 1961, holding that the IAC had no jurisdiction to levy the said penalty on 30th March, 1979 ?"
(2.) THE assessment was completed under s. 143(3) of the IT Act. THE relevant assessment year is 1973-74. While completing the assessment under s. 143(3) of the IT Act, an addition of Rs. 30,000 was made. In appeal the addition was reduced by the AAC to Rs. 11.360. THEreafter the penalty proceedings were initiated under s. 271(1)(c) of the Act 1961, and on reference the penalty has been levied by IAC. That order was challenged and at the stage of Tribunal, the Tribunal has taken the view that as the penalty order has been passed after amendment in s. 274(2) of the Act, the IAC has no jurisdiction after 1st April, 1976. Whether the IAC has the jurisdiction to impose penalty under s. 271(1)(c) of the Act after 1st April, 1976, when the penalty proceedings initiated before that date. This question was referred to this Court. The reference was listed for hearing on 2-3 occasions but none appeared for the assessee Heard learned counsel for the Revenue Mr. Singhi. Learned counsel submits that the issue in the question is covered by the decision of this Court in the case of CIT vs. Bikam Ram Basti Ram (1988) 174 ITR 670 (Raj) : TC 49R.1170 and CIT vs. Bombay Motor (1990) 86 CTR (Raj) 73 : (1992) 193 ITR 643 (Raj) : TC 49R.1174. In both these decisions the view has been taken by this Court that jurisdiction to levy the penalty by IAC is not affected by the amendment of s. 274 which has come in force from 1st April, 1976, if the penalty proceedings are initiated before 1st April, 1976. Learned counsel also submits that the penalty proceedings were initiated before 1976 and that argument has been advanced by the Departmental Representative before the Tribunal, which is referred in para 6 of the order of Tribunal.
(3.) WHEN the penalty proceedings are initiated before 1st April, 1976, in our view the issue is squarely covered by the decision of this Court in the cases referred above. In the result, we answer the question referred in negative i.e., in favour of the Revenue and against the assessee. The reference so made shall stand disposed of accordingly.;