PORWAL UDYOG INDIA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY a reference under S. 256(1) of the IT Act, 1961 (hereinafter referred to as " the Act "), the Tribunal, Indore Bench, has referred the following question of law to this Court for its opinion:

(2.) WHEN the reference came up for hearing before a Division Bench of this Court, the Court by its order dated September 17, 1980, directed the Tribunal to send a supplementary statement of the case and specify the date on which the matter regarding imposition of penalty was referred by the ITO to the IAC. In pursuance of that direction, the Tribunal has now sent a supplementary statement of the case. The Tribunal has found that the case for the levy of penalty under S. 271(1) (c) of the Act was referred by the ITO, " E " Ward, Circle -I, Indore, to the IAC, Range -I, Indore, for further proceedings, vide his memo dated September 11, 1975.

(3.) IN view of the facts stated in the supplementary statement of the case, it must be held, following a Division Bench decision of this Court in CIT vs. A. N. Tiwari (1980) 124 ITR 680 (MP), that as the reference was made to the IAC under S. 274(2) of the Act in accordance with the provisions of that section, as it stood at the time of making the reference, the reference would not be invalidated by the subsequent amendment deleting S. 274(2) from April 1, 1976. Shri Choudhary, learned counsel for the assessee, contended that there was no material on record to show whether the matter which was referred by the ITO to the IAC fulfilled the requirement of a valid reference under S. 274(2) of the Act.