Once a jurisdiction has been legally conferred upon the Inspecting Assistant Commissioner, he cannot be divested of it since there is no provision in the statute to the contrary.

1. In this reference under Sec.256(1) of the Income-tax Act, 1961 (hereinafter called "the Act"), the following question of law has been referred to for our opinion :

"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the Inspecting Assistant Commissioner had no jurisdiction to levy penalties in those cases in view of the amended provisions of Sections 274 and 275 of the Income-tax Act, 1961, which came into force with effect from April 1, 1971 ?"

2. The assessee was assessed in the capacity of an individual. The assessment years in this consolidated reference are 1967-68 and 1968-69. The assessee is a contractor executing contracts in the Division of Koshi Project. The original assessments for the above two years were completed on May 30, 1970, on incomes of Rs. 4,890 and Rs. 6,940 for the two assessment years respectively. Later, the Income-tax Officer came to learn that the assessee had not disclosed certain payments received by him during the relevant years. A proceeding under Section 147 of the Act was, therefore, initiated. In the course of the said proceeding, the Income-tax Officer initiated proceedings for imposition of penalty under Sec.271(1)(c) of the Act. The Income-tax Officer, thereafter, referred the matter to the Inspecting Assistant Commissioner on March 31, 1971. While the penalty proceeding was pending, Sec.274(2) of the Act was amended raising the jurisdiction of the Income-tax Officer to impose penalty up to Rs. 25,000. The Inspecting Assistant Commissioner was vested with jurisdiction to impose penalty only of sums above Rs. 25,000. While the penalty proceeding was still going on, the assessee was pursuing his remedy in appeal in regard to the sums to be assessed, which may be described as quantum appeal. The said quantum appeal was disposed of by the Appellate Assistant Commissioner on March 20, 1973. After the quantum appeal had been disposed of, the Inspecting Assistant Commissioner by his order dated August 29, 1973, imposed penalties of Rs. 17,000 and Rs. 8,200 for the assessment years 1967-68 and 1968-69, respectively. The assessee, being aggrieved by the imposition of penalty, appealed to the Tribunal. The Tribunal deleted the penalty. In the view of the Tribunal, the Inspecting Assistant Commissioner had been divested of his jurisdiction to impose penalty on sums below Rs. 25,000. The Revenue, being aggrieved by the order of the Tribunal deleting the penalty on the ground that the Inspecting Assistant Commissioner had no jurisdiction to impose penalty on sums below Rs. 25,000, prayed for reference to this court. The Tribunal has thus referred the question mentioned above for our opinion.

3. The correctness of the reference to the Inspecting Assistant Commissioner has not been disputed. The only question is whether consequent upon the amendment of Sec.274(2) of the Act, the Inspecting Assistant Commissioner was divested of that jurisdiction which he possessed earlier. This precise question had come up for consideration before us in CIT V/s. Ganga Dayal Sarju Prasad [1985] 155 ITR 618 (Pat) (Tax Case No. 6 of 1976 disposed of on September 4, 1984) and in CIT V/s. Jankidas Mohanlal [1987] 163 ITR 756 (Pat) (Tax Case No. 62 of 1976 disposed of on March 28, 1985). The leading judgments in both the cases were delivered by my learned brother, N. Ahmad J. The ratio of the two decisions is that once a jurisdiction had been conferred in the absence of any specific provision, the Inspecting Assistant Commissioner cannot be divested of the jurisdiction to impose penalty on sums below Rs. 25,000. The present reference must, therefore, be answered in the same terms. It is not necessary to dilate upon the subject at any great length since the law is settled so far as this court is concerned.

4. Mr. K.N. Jain, learned counsel appearing for the assessee, contended that some other High Courts have taken a view different from ours and, therefore, the matter