The main legal point established in the judgment is that the jurisdiction of the Inspecting Assistant Commissioner is established when the Income-tax Officer records the finding of concealed income exceeding Rs. 25,000, and the amendment of the law does not divest the jurisdiction of the judicial authority once seized of the matter.

D.S.Tewatia, J.

1. The following question which has been referred by the Tribunal at the instance of the Commissioner of Income-tax, Jullundur, for the opinion of this court pertains to the jurisdiction of the Inspecting Assistant Commissioner to decide the question of penalty and the consequent imposition of penalty of Rs. 58,000 by him, vide order dated February 25, 1978, under Section 271(1)(c) of the Income-tax Act :

"Whether the Tribunal has been right in law in holding that the penalty amounting to Rs. 58,000 imposed by the Inspecting Assistant Commissioner, vide order dated February 25, 1978, under Section 271(1)(c) of the Income-tax Act, in pursuance of a reference admittedly made under Section 274(2) on December 23, 1976, was without jurisdiction in view of the fact that Sub-section (2) of Section 274 had been omitted by Section 65 of the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976?"

2. Mr. Ashok Bhan, appearing for the petitioner, has canvassed that the order dated December 13, 1979, of the Tribunal holding that the Inspecting Assistant Commissioner had no jurisdiction to deal with the question of imposition of penalty under Section 271(1)(c) of the Income-tax Act (hereinafter referred to as "the Act"), on the date he passed the order imposing penalty, i.e., February 25, 1978, because as a result of the Taxation Laws (Amendment) Act, 1975 (hereinafter referred to as "the Amending Act"), which took effect from April 1, 1976, the Income-tax Officer alone was competent to deal with the question of imposition of penalty and the jurisdiction of the Inspecting Assistant Commissioner envisaged under Sub-section (2) of Section 271 of the Act stood abolished as a result of the deletion of Sub-section (2) of Section 274 with effect from April 1, 1976, as a result of the Amending Act, ran counter to the Division Bench decisions of this court in CIT v. Raman Industries [1980] 121 ITR 405, CIT v. Sadhu Ram [1981] 127 ITR 517, CIT v. Mela Ram Jagdish Raj & Co. [1981] 132 ITR 897 and Telu Ram Raunqi Ram v. CIT [1984] 146 ITR 401, besides the decisions of other High Courts, namely, CIT v. R. Ochhavlal & Co. [1976] 105 ITR 518 (Guj), CIT v. Royal Motor Car Co. [1977] 107 ITR 753 (Guj), Laltaprasad Goenka v. CIT [1983] 143 ITR 924 (Bom), Continental Commercial Corpn. v. ITO [1975] 100 ITR 170 (Mad), CIT v. Eastern Development Corpn. [1982] 135 ITR 516 (Cal), Addl. CIT v. Dr. Khaja Khutabuddinkhan [1978] 114 ITR 905 (AP) and CIT v. Balabhai & Co. [1980] 122 ITR 301 (Guj).

3. Perusal of the judgment of the Tribunal dated December 13, 1979, would show that the Tribunal, inter alia, has based its decision on the Allahabad High Court judgment in CIT v. Om Sons [1979] 116 ITR 215, which view has been reiterated by the same High Court in a judgment in CIT v. Pearey Lal Radhey Raman [1979] 117 ITR 319.

4. Mr. Gupta, appearing for the respondent, has added to the above list, the Karnataka High Court judgment in R. Abdul Azeez v. CIT [1981] 128 ITR 547 and later the Allahabad High Court judgments in Ganesh Dass Ram Gopal v. IAC of I.T. [1983] 142 ITR 101 and Mohd. Oais & Co. v. CIT [1983] 142 ITR 104 (All).

5. From the above, it is clear that the various High Courts have taken a contrary view in regard to the existence of jurisdiction of the Inspecting Assistant Commissioner on the date he passed the order if before that as a result of the provision giving him jurisdiction in the matter has been amended in a way depriving him of the jurisdiction to deal with the question of imposition of penalty.

6. There is also difference of opinion as to whether the relevant date is the date on which the Income-tax Officer has made a reference to the Inspecting Assistant Commissioner or the date on which he had initiated penalty proceedings on his file for the purpose of seeing as to whether on the date on which the Inspecting Assistant Commissioner passed the order, he had the requisite jurisdiction to deal with the matter or