MIRI RAM GIAN CHAND SUNAM vs COMMISSIONER OF Income Tax.

S. S. SODHI J. - The question of law referred for the opinion of this court reads as under :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that when reference u/s 274(2) read with section 271(1)(c) of the Income Tax Act. 1961, had been made on November 25, 1975, the Inspecting Assistant Commissioner was vested with valid jurisdiction for imposing penalty u/s 271(1)(c) even when sub-section (2) of section 274 came to be omitted from the statute book with effect from April 1, 1976 ?"

The matter here arises in the context of the deletion of section 274(2) of the Income Tax Act, 1961, by the Taxation Laws (Amendment) Act, 1975, which came into effect from April 1, 1976.

In the present case, the Income Tax Officer completed the assessment on March 5, 1975, and thereafter made a reference to the Inspecting Assistant Commissioner on November 25, 1975. As the conclusion of the Income Tax Officer regarding concealment of income had been made before the Taxation Laws (Amendment) Act, 1975, came into force, the Inspecting Assistant Commissioner cannot but be held to have been vested with the requisite jurisdiction at the relevant time. This position in law has also been laid down by this court in ITR No. 55 of 1981 ( Commissioner of Income Tax Vs. Prem Singh Deviditta Mal, , decided on December 2, 1988. The reference is accordingly answered in the affirmative, in favour of the Revenue and against the assessee. There will, however, be no order as to costs.