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Section 274(2) of the income-tax act, 1961 [as it stood prior to omission with effect from 1-4-1976]-Penalty-Reference to iac-Whether, after the amendment of provisions in 1-4-1971, iac had jurisdiction to impose penalty in a case referred to him prior to 1-4-1971, even if concealed income did not exceed Rs. 25,000-Held, yes Section 275 of the income-tax act, 1961-Penalty-Bar of limitation-Whether section 275 is a procedural one and its amendment from 1-4-1971 enlarging the period of limitation applied even to pending cases-Held, yes Facts In the course of the assessment proceedings for the assessment year 1966-67, which were completed on 30-5-1970, the ITO initiated penalty proceedings against the assessee-firm in respect of a concealed income of Rs. 23,500. Since the minimum penalty imposable exceeded Rs. 1,000, the ITO, in 1970, referred the case to the IAC under section 274(2). The IAC passed an order on 3-1-1973 imposing a penalty of Rs. 4,265. In the meantime, the Taxation Laws (Amendment) Act, 1970, amended the provisions of sections 274 and 275 with effect from 1-4-1971. On appeal, the Tribunal concluded that if section 275 had not been amended, the penalty proceedings in this case had to be completed on or before 30-5-1972, but in view of the amendment of section 275, these proceedings could be completed by 31-3-1973 and, hence, the order of penalty passed by the IAC was within the limitation period. The Tribunal, however, was of the view that the IAC had no jurisdiction to pass the penalty order as the amount of income in respect of which particulars had been concealed, did not exceed Rs. 25,000 as required by the amended section 274(2) with effect from 1-4-1971. On reference : Held It is settled by the decisions of majority of the High Courts that section 275, which relates to limitation, is purely procedural and it will apply to pending cases. Accordingly, in the instant case, the IAC's order imposing penalty was well within the limitation period. Again, it is settled that section 274 relates to the procedure in which substantive right exists and as there is no specific provision in the 1970 Amending Act divesting the IAC from imposing penalty, the…

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