COMMISSIONER OF INCOME TAX Vs. DHADI SAHU

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Cuttack Bench, has stated these cases on applications made under Section 256(1) of the Income-tax Act of 1961 (hereinafter to be referred to as "the Act") by the revenue and has referred the following common question for opinion of the court:

(2.) THE assessee is an individual deriving income from his share in a partnership business styled as "M/s. Dhadi Sahu & Others". For the assessment years 1968-69 and 1969-70, the assessee filed returns of income disclosing his share income only of the said firm. Assessments were completed for these two years on February 28, 1970, and the Income-tax Officer included the income of the minor children of the assessee who were also partners in the same firm and the income from the house property standing in the name of the assessee's wife which was held as a fact to be belonging to the assessee. As a result of these additions, while the assessee had returned an income of Rs. 5,940 for the assessment year 1968-69, he was assessed on an income of Rs. 30,840. Similarly, for the other year, as against the returned income of Rs. 7,020, he was assessed on an income of Rs. 19,472. THE Income-tax Officer initiated proceedings for imposition of penalty under Section 271(1)(c) of the Act and as he was of the view that the cases were covered by Section 274 of the Act, he referred the cases to the Inspecting Assistant Commissioner. While the matter of imposition of penalty under Section 271(1)(c) was thus pending before the Inspecting Assistant Commissioner, by the Taxation Laws (Amendment) Act of 1970, which came into force with effect from April 1, 1971, the provision in Section 274(2) underwent amendment.

(3.) ON the facts and in the circumstances of the case, and on a true interpretation of Section 274, as amended by the Taxation Laws (Amendment) Act of 1970, the Inspecting Assistant: Commissioner to whom the case had been referred prior to 1971 had no jurisdiction to impose penalty.