SARDAR PRITAM SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference made under Section 256(1) of the Income-tax Act, 1961, referring for our answer the following questions of law :

(2.) THE case arises out of imposition of penalty proceedings for the assessment year 1968-69. THE assessment order for the year was passed on March 29, 1972. THE order imposing penalty was passed by the IAC on April 30, 1975. THE contention of the assesses on the point of limitation was that Section 275, as it stood before its amendment by the Taxation Laws (Amendment) Act, 1970, applied and the order imposing penalty ought to have been passed within two years from the date of completion of the assessment proceedings, i'.e., within two years from. March 29, 1972. Now, the Taxation Laws (Amendment) Act, 1970, came into force on April 1, 1971, even before the date of the assessment order. It is well settled that a provision as to the limitation is a procedural provision except in those cases where, by expiry of limitation, a vested right has arisen in favour of the assessee. In the instant case, the limitation for imposition of penalty did not start to run at all before Section 275 was amended by the Taxation Laws (Amendment) Act, 3970. In the circumstances, there is no question whatsoever of application Section 275 as it stood before the amendment. THE Tribunal, in our opinion, was clearly right in holding that Section 275 as amended by the Taxation Laws (Amendment) Act, 1970, applied. It is not in dispute that the order of the IAC dated April, 30, 1975, was passed within six months from the end of the month in which the order of the Appellate Tribunal was passed. In this view of the matter, the order imposing penalty was clearly within limitation under Section 275 as amended.

(3.) THE assessee will pay the costs of this reference to the Department Counsel's fee Rs. 100 if certified.