COMMISSIONER OF INCOME TAX Vs. BHIKARI CHARAN PANDA

JUDGEMENT

(1.) AT the instance of the revenue on an application made under Section 256(1) of the Income-tax Act, 1961 (hereinafter to be referred to as "the Act"), the Income-tax Appellate Tribunal, Cuttack Bench, has stated this case and referred the following question for opinion of the court:

(2.) ASSESSEE is an advocate practising at Cuttack. In respect of the assessment year 1970-71, he filed a return disclosing an income of Rs. 3.933. His income was computed at Rs. 16,300. In appeal the total income was reduced to Rs. 14,300. A penalty proceeding was initiated under Section 271(1)(c) of the Act by the Income-tax Offer on December 31, 1970, and was duly referred to the Inspecting Assistant Commissioner under Section 274(2) of the Act. The Inspecting Assistant Commissioner by order dated 20th of February, 1973, imposed penalty on the assessee. ASSESSEE claimed before the Tribunal in appeal that the assessment having been framed of December 31, 1970, and the penalty proceeding having bona initiated on the same day, the penalty proceeding had to close within two years as provided under the unamended Section 275 of the Act On behalf of the revenue it was contended before the Tribunal that the penalty proceeding was a pending action before the Inspecting Assistant Commissioner and the period of limitation prescribed under Section 275 of the Act was enlarged by amendment under the Taxation Laws (Amendment) Act of 1970 with effect from April 1, 1971, and as the final order imposing penalty has been passed within the period of limitation provided under the amended Section 275, no objection on the ground of limitation is available to be raised. The Tribunal held :