COMMISSIONER OF INCOME TAX Vs. KATARIA TRANSPORT COMPANY

JUDGEMENT

(1.) THE reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue is to decide the following question of law, namely :

(2.) IT has been held by us in CIT v. Sri Niwas Rice and Oil Industries [1988] 169 ITR 253 (Raj) that on deletion of Sub-section (2) of Section 274 of the Act with effect from April 1, 1976, the Inspecting Assistant Commissioner has been divested of jurisdiction to levy penalty ; and the Inspecting Assistant Commissioner would have jurisdiction to levy penalty only if the reference had been made to him before April 1, 1976. IT was held that mere initiation of penalty proceedings before April 1, 1976, is not sufficient to clothe the Inspecting Assistant Commissioner with the jurisdiction to levy penalty where the reference to the Inspecting Assistant Commissioner had been made subsequent to April 1, 1976. In this case, the reference to the Inspecting Assistant Commissioner was made by the Income-tax Officer subsequent to April 1, 1976, and, therefore, the Inspecting Assistant Commissioner had no jurisdiction to levy the penalty. The above question has to be answered accordingly.