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Commissioner of Income-tax Vs. Smt. Raj Rani Devi - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 466 of 1976
Judge
Reported in[1979]116ITR358(All)
ActsIncome Tax Act, 1961 - Sections 274(2) and 275
AppellantCommissioner of Income-tax
RespondentSmt. Raj Rani Devi
Appellant AdvocateA. Gupta, Adv.
Respondent AdvocateNone
Excerpt:
- - in that case, the commissioner had imposed penalty by an order dated 29th november, 1971. the order was held bad......1973, the ito referred the case to the iac of income-tax for drawing up penalty proceedings. the concealed income was rs. 10,000. with effect from 1st april, 1971, section 274(2) of the i.t. act, 1961 (hereinafter described as 'the act'), had been amended. the jurisdiction of the iac to initiate penalty proceedings was confined to cases where the amount of concealed income was in excess of rs. 25,000. it is thus evident that if the amended provisions were applicable the iac had no jurisdiction as the amount of concealed income was admittedly rs. 10,000 which is much below the limit of rs. 25,000. in cit v. om sons : [1979]116itr215(all) , a bench of this court has held that jurisdiction must not only be possessed by the authority initially but it must continue to be clothed with that.....
Judgment:

Satish Chandra, C.J.

1. On 19th January, 1973, the ITO referred the case to the IAC of Income-tax for drawing up penalty proceedings. The concealed income was Rs. 10,000. With effect from 1st April, 1971, Section 274(2) of the I.T. Act, 1961 (hereinafter described as 'the Act'), had been amended. The jurisdiction of the IAC to initiate penalty proceedings was confined to cases where the amount of concealed income was in excess of Rs. 25,000. It is thus evident that if the amended provisions were applicable the IAC had no jurisdiction as the amount of concealed income was admittedly Rs. 10,000 which is much below the limit of Rs. 25,000. In CIT v. Om Sons : [1979]116ITR215(All) , a Bench of this court has held that jurisdiction must not only be possessed by the authority initially but it must continue to be clothed with that power throughout the period the matter is pending disposal before him. It was further held that as Section 274(2) has been amended with effect from April 1, 1971, the IAC of Income-tax did not have jurisdiction to impose the penalty. In that case, the Commissioner had imposed penalty by an order dated 29th November, 1971. The order was held bad. In the present case, the reference itself to the IAC of Income-tax was made on 19th January, 1973. The order was passed by him on 24th February, 1973. On both the dates, the IAC of Income-tax had no jurisdiction to entertain this case, as the amount of concealed income was only Rs. 10,000. The Tribunal accordingly quashed the levy of penalty, inter alia, on grounds which are in accordance with the decision of this court.

2. We, therefore, answer the following referred question:

'Whether, on the facts and in the circumstances of the case, the Tribu-bunal was justified in holding that the penalty order was invalid?'

3. in the affirmative in favour of the assessee and against the department. As no one appeared on behalf of the assessee, there will be no order as to costs.


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