Law:

Section:

Section 274, read with section 271(1)(c) of the Income-tax Act, 1961 - Penalty - Procedure for imposition of - Assessment year 1970-71 - Assessee filed return on 22-12-1970 - Assessment order was made on 25-1-1973 and penalty notice was issued on same day - Concealed income was Rs. 4000 and minimum penalty imposable was Rs. 4000 - Amendment to section 274(2) came into effect on 1-4-1971 which gave jurisdiction to ITO to deal with penalty proceedings in case concealed income was below Rs. 25000 - Prior to amendment ITO could deal with penalty proceedings if minimum penalty imposable was not exceeding Rs. 1000 - Whether amendment to section 274(2) was not retrospective and law applicable being law in force as on date of filing return, ITO had no jurisdiction to levy penalty and as such penalty order had to be set aside - Held, yes - Whether by submitting to a jurisdiction the petitioner could confer any jurisdiction the petitioner could confer any jurisdiction on an authority who had no jurisdiction at all - Held, no FACTS The return in respect of the relevant assessment year was filed by the assessee on 22-12-70. The assessment order was made on 25-1-1973, and the notice under section 271(1)(c) was issued on the same day. The concealed income was Rs. 4000 and the minimum penalty was Rs. 4000. The order levying the penalty was dated 9-10-1973. The amendment of section 274(2) was with effect from 1-4-1971. The assessee's case was that the provision that was in force on the date when he filed the return was the relevant one and not the one that was in force or the date on the date on which either the notice under section 271(1)(c) was issued on the date which the penalty order was made. The revenue contended that in respect of the penalty orders, the law in force on the date of the order levying the penalty was only relevant. On writ : HELD Before the amendment the ITO could deal with cases falling under section 271(1)(c) only if the minimum penalty imposable did not exceed a sum of Rs. 1,000. Under section 271(1)(c)(iii ) the minimum penalty imposable was a sum equal to the amount of income in respect of which the particulars have been concealed or inaccurate…

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