Law: Income Tax Act, 1961

Section: 271(1)(c),274(2)

Income-tax---Penalty---Concealment of income---Jurisdiction to impose penalty--¬Change of law---Amendment of S.274(2) by Indian Taxation Laws (Amendment) Act, 1970, with effect from 1-4-1971---Effect---Amendment of law is procedural and would apply to pending cases---Return filed before amendment of S.274(2)---Assessment made after amendment---Penalty levied more than Rs.1,000 but income concealed less than Rs.25,000---I.T.O. has jurisdiction to impose penalty---Indian Income Tax Act, 1961, Ss.271(1)(c) & 274(2) [after amendment by Taxation Laws (Amendment) Act, 1970]. For the assessment year 1970-71, the assessee filed a return on December 13, 1970, disclosing an income of Rs. 2,105. The Income Tax Officer determined the total income of the assessee in the assessment made by him on January 12, 1973, at Rs. 25,510. The Income Tax Officer initiated penalty proceedings under section 271(t)(c) of the Income Tax Act. 1961, and levied a penalty of Rs. 24,400 by his order dated March 24, 1975. On appeal to the Appellate Assistant Commissioner, the assessee contended that since the penalty imposed exceeded Rs.1,000 the Income Tax Officer ought to have referred the case to the Inspecting Assistant Commissioner, since before the amendment made to section 274(2) by the Taxation Laws (Amendment), Act, 1970, with effect from April 1, 1971, the Income-tax Officer had no jurisdiction to impose a penalty of more than Rs.1,000. The Appellate Assistant Commissioner held that the amendment was only procedural in nature and, therefore, the amended section-would apply in this case and so the Income-tax Officer had jurisdiction to impose the penalty. On further appeal, the Tribunal held that the Income-tax Officer had no jurisdiction to levy the penalty. On a reference: Held, that the Tribunal was not right in holding that the Income-tax Officer had no jurisdiction to levy the penalty under section 271(1)(c) of the Act. [Since the Tribunal had not considered the merits of the case, the matter was remanded to the Tribunal for decision afresh on merits]. Varkey Chacko v. C. I. T. (1993) 203 I T R 885 (SC) rel. C.I.T v. Dhadi Sahu (1976) 105 ITR 56 (Orissa) anti Continental…

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