COMMISSIONER OF INCOME TAX BANGALORE Vs. R SHARADAMMA

JUDGEMENT

(1.) "Whether on the facts and in the circumstances of the case, the I.T.A.T. is right in law in cancelling the penalty levied by the Inspecting Assistant Commissioner under Section 271(1) (c) holding that the Inspecting Assistant Commissioner had no jurisdiction to levy penalty under Section 271(1)(c) in view of changed provisions of law -

(2.) The assessment year concerned herein is 1972-73.

(3.) The High Court followed its earlier decision in R. Abdul Azeez v. Commr. of Income-tax, Karnataka, (1981) 128 ITR 547, and has answered the question against the Revenue. In R. Abdul Azeez, the Karnataka High Court had taken the view that by virtue of the omission of sub-section(2) of Section 274 of the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976, the penalty proceedings pending before the Inspecting Assistant Commissioner on March 31, 1976, cannot continue before him thereafter and that he has no jurisdiction to continue those proceedings or to pass any orders therein. It has been held that any orders passed him soon or after April 1, 1976, levying penalty, are without jurisdiction. The question is whether the said view is correct. We think not. We are supported in saying so by the ratio of the decision of this Court in Commr. of the Income-tax v. Dhadi Sahu, (1993) 199 ITR 610 : (1993 AIR SCW 3578). The facts in Dhadi Sahu, are the following : the assessment years concerned therein were 1968-69 and 1969-70. Assessment order were passed in respect of the said assessment years on February 28, 1970. The Income-tax Officer initiated proceedings for the imposition of penalty under Section 271(1) (c) of the Act, and the matter was referred to the Inspecting Assistant Commissioner under the Section 274(2) of the Act. On the said date, Section 274(2) of the Act read as follows :-