By reason of the said amendment the Income Tax Officer was obliged to refer to the Inspecting Assistant Commissioner such cases falling under clause c of sub section 1 of Section 271 where the amount of income, as determined by the ITO on assessment, in respect of which particulars had been companycealed or inaccurate particulars had been furnished exceeded the sum of Rs 25,000.
On March 27, 1972, the ITO made the orders of assessment and initiated penalty proceedings against the assessee on the basis of a finding recorded in the assessment order that there had been companycealment of income in respect of an amount which did number exceed Rs 25,000.
It answered in the negative, that is, against the appellant assessee and in favour of the Revenue respondent , the following question Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that the Income Tax Officer had numberjurisdiction to levy the penalty and that he should have referred the case to the Inspecting Assistant Commissioner for imposition of penalty?
The reference pertained to the Assessment Year 1968 69, the relevant accounting period having ended on March 31, 1968.
After companysidering the assessees objections, the ITO, by order dated March 26, 1974, imposed a penalty of Rs 10,000.
The Revenue carried the matter to the Income Tax Appellate Tribunal, which companyfirmed the order of the AAC.
Prior to the said amendment where, in a case falling under clause iii of sub section 1 of Section 271, the minimum penalty imposable exceeded the sum of Rs 1000, the Income Tax Officer was obliged to refer the case to the Inspecting Assistant Commissioner.
The assessee appealed to the Appellate Assistant Commissioner, who set aside the penalty order on the ground that the ITO did number have the jurisdiction to levy the penalty.
Even so, the IAC passed orders on February 15, 1973, imposing penalty in the sums of Rs 24,000 and Rs 12,500 respectively for the Assessment Years 1968 69 and 1969 70.
With effect from April 1, 1971, sub section 2 of Section 274 of the Income Tax Act, 1961, was amended.
The assessee filed his return on April 16, 1970.
The judgment under appeal was delivered on a reference under Section 256 2 of the Income Tax Act, 1961.
It companycluded that the companypetence or jurisdiction of the authority to initiate the penalty proceedings companyld be governed only by the law which was in force on the date of initiation of such proceedings.
The Judgment of the Court was delivered by BHARUCHA, J. This is an appeal on a certificate granted by the High Court of Kerala.
