COMMISSIONER OF WEALTH-TAX Vs. HEMANTPAT SINGHANIA

JUDGEMENT

(1.) This is a reference under Section 27(1) of the Wealth-tax Act, 1957 (for short " the Act"), at the instance of the Commissioner of Wealth-tax, Kanpur. The following question of law has been referred for the opinion of this court :

(2.) In CIT v. Om Sons [1979] 116 ITR 215 (All), this court had occasion to consider a somewhat similar controversy which arose under the corresponding provisions of the Income tax Act, 1961. In that case, the Income-tax Officer had initiated proceedings under Section 271(1)(c) of the Income-tax Act and referred the matter to the Inspecting Assistant Commissioner under Sub-section (2) of Section 274 of that Act. Before the penalty could be imposed by the Inspecting Assistant Commissioner, sub Section (2) of Section 274 of the Income-tax Act had been amended and the jurisdiction of the Inspecting Assistant Commissioner to impose penalty was taken away on the date when he passed the penalty orders. In such a situation, this court held that a court or Tribunal deciding a matter must not only be possessed of jurisdiction initially but also be clothed with the power to decide the matter when the final order is passed. Thus, on the date when the Inspecting Assistant Commissioner passed the final order, his jurisdiction to do so had been taken away by the amendment in Section 274(2) of the Act. In such a situation, the order passed by him was held to be without jurisdiction. The principle enunciated in the case of Om Sons [1979] 116 ITR 215 (All) was followed and applied by this court in the cases where the question for consideration was whether, after the omission of Sub-section (2) of Section 274 of the Income-tax Act, 1961, with effect from April 1, 1976, by the Taxation Laws (Amendment) Act, 1975, the Inspecting Assistant Commissioner was competent to pass the penalty orders in respect of the cases in which reference had been made to him by the Income-tax Officer prior to April 1, 1976. The view taken was that the Inspecting Assistant Commissioner having lost the jurisdiction was not competent to pass any penalty order in such cases. In this connection, we may refer to the decisions of this court in Ganesh Dass Ram Gopal v. IAC [1983] 142 ITR 101 and CIT v. Lal Chand Jain [1989] 180 ITR 448. In the last mentioned case, it was held that by the amendment brought about by the Taxation Laws (Amendment) Act, 1975, the legislative intention was to destroy the continuance of the power of the Inspecting Assistant Commissioner even in respect of matters which had already been referred to him by the Income-tax Officer prior to April 1, 1976, and the Inspecting Assistant Commissioner had no jurisdiction to pass a penalty order under Section 271(1)(c) of the Income tax Act on or after April 1, 1976.

(3.) The allied provisions of the Income tax Act referred to above are analogous to the provisions under the Wealth-tax Act with which we are concerned in this reference. By the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976, the Inspecting Assistant Commissioner had ceased to be the " competent authority" to pass any penalty order, after the said date with reference to the penalty imposable on an assessee under Section 18(1)(c) of the Act. The rule of law laid down in the cases referred to hereinabovc is equally applicable to the case in hand.