Orissa H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the IAC had no jurisdiction to impose penalty under s. 18(1)(c) in view of the change of law brought about by the Taxation Laws (Amendment) Act, 1975 ?

S. C. Ray, for the Revenue : B. K. Mohanty, for the Assessee

H. L. AGRAWAL, C. J.:

In all these five cases for five different assessment years, the Tribunal was directed to state a case and make a reference under s. 27(3) of the WT Act, 1957 (for short, “the Act”), on the following question of law framed by this Court :

“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the IAC had no jurisdiction to impose penalty under s. 18(1)(c) in view of the change of law brought about by the Taxation Laws (Amendment) Act, 1975 ?”

Penalty proceedings were started for the asst. yrs. 1968-69 to 1972-73 by the WTO under s. 18(1) (c) of the Act and the matter was referred to the IAC under s. 18(3) who, in his turn, imposed penalties to the tune of Rs. 1,10,000 for each of the five assessment years.

In the appeal before the Tribunal, it was contended on behalf of the assessee, inter alia, that in view of the change brought about by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1st April, 1976, the IAC had ceased to be the “competent authority” to impose penalty and, accordingly, the orders of penalty, having been passed in the month of March, 1977, i.e., after 1st April, 1976, were bad in law.

The Tribunal, relying on the decision of this Court in CIT vs. Dhadi Sahu (1976) 105 ITR 56, accepted this contention of the assessee and cancelled the penalties. But the Revenue succeeded in getting the statement of case called for on the question of law indicated above.

On behalf of the assessee, reliance was again placed on Dhadi Sahu’s case (1976) 105 ITR 56 (Ori), where exactly the same question was referred and answered in favour of the assessee. On the basis of that decision which is applicable to this case, the answer to the question must be given in favour of the assessee and it must be held that the IAC had ceased to have jurisdiction to pass the orders of penalty.

The assessee in the circumstances should also get the costs of these references. Hearing fee is, however, assessed at Rs. 250 only.

S. C. MOHAPATRA, J.:

I agree.

[Citation : 173 ITR 372]