The jurisdiction of the authority who can pass the penalty order has to be looked into with reference to the law as on the date of initiation of proceedings and not with reference to subsequent events unless the amendment so made is with retrospective effect.

( 1 ) THIS reference relates to the assessment year 1973-74.

( 2 ) THE brief facts are these. One Lal Chand Jain, the respondent-assessee, carried on business in iron goods under different names. He initially filed a return of his income on September 7, 1973, showing an income of Rs. 33,965. The business and residential premises of the assessee as well those of his son, Indra Chand Jain, were searched on April 22, 1974, by the income-tax officials. In the search operations, certain cash, stocks and books of account pertaining to the assessee were seized. The assessee-along with other members of his family made a combined petition dated April 2, 1974, under Section 271 (4a) of the Income-tax Act, 1961 (for short "the Act"), to the Income-tax Commissioner, offering a sum of Rs. 80,000 to be taxed.

( 3 ) SUBSEQUENTLY, this petition was withdrawn and another petition was filed on April 15, 1975, in which different amounts were offered for the assessment years 1973-74 to 1975-76 to be taxed being the amounts of unexplained income. It is not necessary to give the details of the amounts for each year. The assessee also filed a revised return for the assessment year in question on May 21, 1975, declaring a total income of Rs. 57,840. However, the assessment was completed on a total income of Rs. 61,388 by an assessment order dated September 6, 1975. While framing the assessment, the Income-tax Officer also recorded a finding to the effect that the assessee had filed incorrect particulars of his income in the original return and had failed to disclose correct particulars of certain deposits with certain companies which were detected on account of search in the business and residential premises of the assessee. Therefore, it was observed :

"this clearly shows that the assessee has concealed his income. Penalty proceedings are initiated for imposition of penalty for concealment of income for which a show-cause notice under Section 274 is being issued separately. As the amount of penalty imposable is above Rs. 25,000, the case has been referred to the Inspecting Assistant Commissioner, Agra, before whom the penalty proceedings will be concluded. "

( 4 ) THE assessee was subjected to a penalty of Rs. 30,000 under Section 271 (1) (c) read with sub-section (2) of Section 274 of the Act by the Inspecting Assistant Commissioner by his order dated March 13, 1978. On appeal, the Income-tax Appellate Tribunal vacated the penalty order on the ground that on the date the Inspecting Assistant Commissioner passed the said order, he had no jurisdiction as he was divested of it, inasmuch as Sub-section (2) of Section 274 of the act was deleted with effect from April 1, 1976, by Section 66 of the Taxation Laws (Amendment) Act, 1975. In this view of the matter, the Tribunal did not address itself, on merits, to the question whether any penalty was leviable or not, on facts.

( 5 ) AT the instance of the Revenue, the Income-tax Appellate Tribunal, B-Bench, New Delhi, has referred the following question under Section 256 (1) of the Act for the opinion of this court:

"whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the Inspecting Assistant Commissioner had no jurisdiction to levy penalty of Rs. 30,000 under Section 271 (1) (c) of the Income-tax Act, 1961, for the assessment year 1973-74 on March 13,1978 ?"

( 6 ) THE assessee is not represented in this case. We have heard learned counsel for the Revenue. In our opinion, the question referred is to be answered in the affirmative.

( 7 ) SECTION 274 (2), before the Amendment Act, was in the following terms :

" (2) Notwithstanding anything contained in Clause (iii) of Sub-section (1) of Section 271, if in a ease falling under Clause (c) of that sub-section, the amount of income (as determined by the income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have be