The jurisdiction of a Tribunal to try a case is a vested right and is to be determined according to the law in force at its institution. A change in law pending the case cannot affect the right of the parties to continue proceedings in that Tribunal in the absence of provisions to the contrary.

Rajendra Nath Mittal, J.

1. The Income-tax Appellate Tribunal, Chandigarh Bench, at the request of the Commissioner of Income-tax, Patiala, referred the following question of law for decision of this court under Section 256(1) of the I.T. Act, 1961 (hereinafter referred to as "the Act"):

"Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the Inspecting Assistant Commissioner of Income-tax was not legally competent to pass the penalty order ?"

2. Briefly the facts which have given rise to this reference are as follows :

3. The assessee is a registered firm and manufactures and sells tool bits. For the accounting year ending March 31, 1965, relevant to the assessment year 1965-66, the assessee filed a return of income on September 30, 1965, wherein it showed its income as Rs. 10,365. While making the assessment the ITO noticed that the assessee had purchased goods worth Rs. 96,648 for which bills were not produced by it. He also categorised 26 separate cash credits, the peak of which on February 8, 1965, came to Rs. 60,882. The assessee, when asked to explain the source of the credits, did not furnish any explanation, but said that the amount of Rs. 60,882 be included in the assessment subject to an adjustment of Rs. 31,000 which had been taxed in the earlier year. The ITO allowed the deduction of Rs. 31,000 as claimed and assessed tax at Rs. 29,882 as income from undisclosed sources. The assessee also agreed to pay tax on business income of Rs. 30,118 as against the income of Rs. 10,365 as declared by it earlier. Thus, the assessment was completed on February 26, 1970, at a total sum of Rs. 60,000. The assessee did not file any appeal against the assessment order.

4. The ITO initiated penalty proceedings under Section 271(1)(c) of the Act before completing the assessment and, as the minimum penalty imposable exceeded Rs. 1,000, the matter was referred to the IAC. He, vide order dated March 29, 1972, passed under Section 274(2) read with Section 271(1)(c) of the Act, levied a penalty of Rs. 4,239. The assessee went up in appeal against the order of the IAC to the Tribunal. The Tribunal held that the onus to prove the genuineness of the cash credits lay upon the assessee and it had not been discharged. Consequently, the penalty under Section 271(1)(c) was exigible. The assessee had pleaded that the penalty proceedings should have been finalised on or before March 25, 1972, but as the same had been finalised on March 29, 1972, the penalty order was barred by limitation. The Tribunal did not accept the contention of the assessee and came to the conclusion that under Section 275 of the Act as amended with effect from April 1, 1971, the IAC could legally pass an order on March 29, 1972. It was also argued on behalf of the assessee that on account of the amendment of Sections 274(2) and 275 by the Taxation Laws (Amendment) Act, 1970, which came into force from April 1, 1971, the IAC could assume jurisdiction if the minimum penalty imposable exceeded Rs. 25,000. In the case in hand the minimum penalty was Rs. 4,239 and, therefore, the IAC had no jurisdiction to levy the penalty. The Tribunal accepted the contention and cancelled the penalty. At the request of the CIT, the above-said question has been referred for the opinion of this court.

5. The learned counsel for the revenue has contended that at the time of institution of the penalty proceedings, the IAC had the jurisdiction to impose penalty. Later, by virtue of the Taxation Laws (Amendment) Act, 1970 (Act 42 of 1970) (hereinafter referred to as the "Amendment Act"), which came into force on April 1, 1971, the jurisdiction to levy penalty was conferred on the ITO. He submits that if the IAC had the jurisdiction to impose penalty when the proceedings were initiated, subsequent amendment in the Act would not divest him of that jurisdiction. Mr. Awasthy argues that once a person institutes a case in a Tribunal, he has a vested