Law: Income Tax Act, 1961

Section: 271(1)(c),274

Income-tax----Penalty---Concealment of income---Law applicable to assessment--¬Jurisdiction to levy penalty---Penalty proceedings pending before I.A.C. on March 31, 1976---Effect of omission of subsection (2) of S.274, w.e.f. 1-4¬1976---I.A.C. competent to continue with proceedings and pass appropriate orders---Indian Income Tax Act, 1961, Ss.271(1)(c) & 274---[Abdul Azeez (R.) v. CIT (1981) 128 ITR 547 (Kar.) overruled]. The general principle is that a law which brings about a change in the forum does not affect pending actions unless an intention to the contrary is clearly shown. One of the modes by which such an intention is shown is by making a provision for change over of proceedings from the Court or the Tribunal where they are pending to the Court or the Tribunal which, under the new law, gets jurisdiction to try them. Where a reference of proceedings for levy of penalty under section 271(1)(c) of the Income-tax Act, 1961, was made to the Inspecting Assistant Commissioner under section 274(2) of the Act, in accordance with the law in force on the date of reference: Held, accordingly, that once the Inspecting Assistant Commissioner was thus seized of the matter, he did not lose seizin thereof on account of the deletion of subsection (2) of section 274 by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976. The Inspecting Assistant Commissioner did not lose the jurisdiction to continue with the proceedings pending before him on March 31, 1976. He was entitled to continue with those proceedings and pass appropriate orders according to law. Abdul Azeez (R.) v. CIT (1981) 128 ITR 547 (Kar.) overruled. CIT v. Dhadi Sahu (1993) 199 ITR 610 (SC) applied. lx Manujendra Dutt v. Purnendu Prosad Roy Chowdhury AIR 1967 SC 1419 ref. ORDER This appeal is preferred against the order of the Karnataka High Court answering the question referred to it under section 256(1) of the Income Tax Act, 1961, in the affirmative, i.e., in favour of the assessee and against the Revenue. The question referred to the High Court reads: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in cancelling the…

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