COMMISSIONER OF INCOME TAX Vs. OM SONS

JUDGEMENT

(1.) AT the instance of the Commissioner of Income-tax, the Tribunal has referred the following question for our opinion:

(2.) THE assessee carries on retail business at Delhi in woollen goods. For the assessment year 1969-70, it filed a return showing a loss of Rs. 28,170. THE assessment was, however, computed on a total income of Rs. 27,860. On appeal, the total income computed by the ITO was sustained and a loss of Rs. 14,313 was determined by the AAC. While computing the assessment, the ITO initiated proceedings under Section 271(1)(c) of the I.T. Act, and referred the matter to the IAC under Section 274 of the Act. THE IAC held that the provisions of Section 271(1)(c) were attracted, and imposed a penalty of Rs. 15,000 by his order dated November 29, 1971. An appeal was preferred by the assessee before the Tribunal. THE Tribunal held that as Section 274(2) of the I.T. Act had been amended, with effect from April 1, 1971, by the Taxation Laws (Amendment) Act of 1970, the IAC did not have jurisdiction to impose penalty. It is not disputed that at the time when the reference was made by the ITO to the IAC, it was valid under the law as it then stood. THE amending Act which has been referred to earlier, amended Section 274(2) and in its place substituted the following :

(3.) WE, accordingly, answer the question referred in the affirmative, in favour of the assessee and against the department. The assessee is entitled to its costs which are assessed at Rs. 200.