High Court Of Rajasthan
CIT vs. Kataria Transport Co.
Sections 271(1)(c), 274(2)
J.S. Verma, C.J. & I.S. Israni, J.
DB IT Ref. No. 31 of 1981
7th April, 1988
Counsel Appeared
Hiralal Katariya, for the Assessee
BY THE COURT :
The reference under s. 256(1) of the IT Act, 1961, at the instance of the Revenue is to decide the following question of law, namely :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the IAC had no jurisdiction to levy the penalty on September 22, 1978 ?”
It has been held by us in CIT vs. Sri Niwas Rice and Oil Industries (1988) 68 CTR (Raj) 60 : (1988) 169 ITR 253 (Raj) that on deletion of sub-s. (2) of s. 274 of the Act w.e.f. April 1, 1976, the IAC has been divested of jurisdiction to levy penalty; and the IAC would have jurisdiction to levy penalty only if the reference had been made to him before April 1, 1976. It was held that mere initiation of penalty proceedings before April 1, 1976, is not sufficient to clothe the IAC with the jurisdiction to levy penalty where the reference to the IAC had been made subsequent to April 1, 1976. In this case, the reference to the IAC was made by the ITO subsequent to April 1, 1976, and, therefore, the IAC had no jurisdiction to levy the penalty. The above question has to be answered accordingly.
Consequently, the reference is answered against the Revenue and in favour of the assessee by holding that the Tribunal was justified in holding that the IAC had no jurisdiction to levy penalty for the reason given by us.
[Citation : 179 ITR 635]
