M.R.Sharma, J.

1. For the assessment year 1971-72, the case of the assessee was taken up on January 28, 1974. It was found by the ITO that the assessee had prima facie concealed an income of Rs. 40,000. On August 6, 1974, the ITO referred the case to the IAC, Ludhiana Range, Ludhiana, on the ground that he only had the jurisdiction to impose a penalty as the income concealed exceeded Rs. 25,000. The IAC accepted the reference and vide his order, dated April 29, 1977, imposed a penalty of Rs. 20,000 on the assessee. The assessee went up in appeal before the Income-tax Appellate Tribunal, Amritsar Bench, which was dismissed. The assessee claimed a reference on the ground that with effect from April 1, 1976, the ITO had come to be vested with jurisdiction to impose penalty to the extent of unlimited amount and for that reason the order passed by the IAC was without jurisdiction. Its prayer was allowed and the Tribunal has referred the following question of law to us for our decision :

"Whether, on the facts and in the circumstances of the case, the IAC was competent in law to impose the penalty in view of the amended provisions of law, which were effective from April 1, 1976 ?