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)(