Commissioner of Income Tax vs Bishamber Dayal and Co.

Arijit Pasayat, C. J.

This judgment will govern Income Tax References Nos. 341 and 342 of 1980.

Heard. At the instance of the Revenue, the Income Tax Appellate Tribunal, Delhi Bench-D (in short "the Tribunal"), has referred u/s 256(1) of the Income Tax Act, 1961 (in short "the Act"), the following question, common to both references, for the opinion of this court :

"Whether, on the facts and circumstances of the case, the Appellate Tribunal is right in law in cancelling the penalties levied by the Inspecting Assistant Commissioner on July 31, 1976, against the assessed for the assessment years 1972-73 and 1973-74 u/s 271(1)(c) of the Income Tax Act, 1961, as without jurisdiction ?"

The assessment years involved are 1972-73 and 1973-74. It is the undisputed position that fresh order of assessments after reopening of the assessments which were earlier made ex parte were completed on April 30, 1976. Obviously reference was made to the Inspecting Assistant Commissioner (in short "the IAC"), and penalties were imposed on July 31, 1976. By virtue of an amendment to Section 274 of the Act, by the Taxation Laws (Amendment) Act, 1975, whereby Sub-section (2) was deleted, the Inspecting Assistant Commissioner lost jurisdiction to impose penalty. What would be the effect if the reference was made earlier to April 1, 1976, is not the question here. Therefore, when the reference was made the Inspecting Assistant Commissioner had been divested of his jurisdiction to impose penalty. That being the position, the Tribunal was justified in its conclusion. The answer to the question referred, Therefore, is in the affirmative, in favor of the assessed and against the Revenue.

The references stand disposed of.