TMI Blog1992 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... 154 (CTK) of 1973-74. The facts giving rise to these appeals, briefly stated, are as follows: The respondent ( hereinafter referred to as " the assessee " ), is an individual and the proceedings relate to the imposition of penalty under section 271(1)(c) read with section 274(2) of the Income-tax Act, 1961 ( hereinafter referred to as " the Act " ), for the assessment years 1968-69 and 1969-70. For those two years, the assessee had disclosed in his return only his own share of the profits from a firm of which he was a partner but, failed to disclose the income falling to the share of his minor children from house property which ostensibly stood in the name of his wife but really belonged to the assessee, the wife being only a benami. The income returned and assessed were as follows : Assessment year Income returned Income assessed Rs. Rs. 1968-69 6,940 30,840 1969-70 7,020 14,472 The assessment orders were passed on February 28, 1970. The Income tax Officer initiated proceedings for the imposition of penalty under section 271(1)(c) of the Act and the matter was referred to the Inspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axation Laws (Amendment) Act, 1970, the Inspecting Assistant Commissioner to whom the case was referred prior to April 1, 1971, had jurisdiction to impose penalty ? " By judgment dated December 5, 1975 (see [1976] 105 ITR 56 ), Division Bench of the Orissa High Court answered the question in favour of the assessee. The appellant thereupon preferred applications under section 261 of the Act for certificates of fitness for appeal to this court but the High Court rejected those applications. That is how the matter has come up to this court by way of special leave petitions and this court granted the special leave, as stated earlier, by its order dated August 4, 1977. We had the advantage of hearing, Mr. I. Ramamurthy, Senior Advocate, on behalf of the appellant who argued the matter very fairly in spite of the fact that nobody appeared on behalf of the respondent despite service. The learned judges of the Orissa High Court agreed with the appellate order of the Income-tax Appellate Tribunal, Cuttack, dated December 19, 1973, and took the view thus (see [1976] 105 ITR 56, 62) : " If the Inspecting Assistant Commissioner had passed final orders prior to the Amending Act of 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the minimum penalty imposable exceeded Rs. 1,000, but the amount of income in respect of which the particulars were concealed did not exceed Rs. 25,000 and the order of the Inspecting Assistant Commissioner was passed on February 15, 1973, i.e., after the coming into force of the Amending Act which amended section 274(2) of the Act. Learned counsel for the appellant submitted that, although the order of imposition of penalty was passed by the Inspecting Assistant Commissioner after the Amending Act had come into force, yet if the reference made by the Income-tax Officer was validly made before that date, the Inspecting Assistant Commissioner continued to have jurisdiction to impose penalty. In other words, the argument is that the amendment brought out in section 274(2) with effect from April 1, 1971, was not applicable to pending references. The view of the High Court, on the other hand, is that, even in a reference which was pending under section 274(2) on the date when the section stood amended, the Inspecting Assistant Commissioner could not pass any order imposing penalty if the amount of income concealed did not exceed Rs. 25,000. It may be stated at the outset t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question is of change of forum, it ceases to be a question of procedure only. The forum of appeal or proceedings is a vested right as opposed to pure procedure to be followed before particular forum. The right becomes vested when the proceedings are initiated in the Tribunal or the court of first instance and, unless the Legislature has, by express words or by necessary implication, clearly so indicated, that vested right will continue in spite of the change of jurisdiction of the different Tribunals or forums. This view of ours finds support in two decisions of the Gujarat High Court in CIT v. Royal Motor Car Co. [1977] 107 ITR 753 ; CIT v. Balabhai and Co. [1980] 122 ITR 301, a decision of the Patna High Court in CIT v. Ganga Dayal Sarju Prasad [1985] 155 ITR 618, a decision of the Punjab and Haryana High Court in CIT v. Raman Industries [1980] 121 ITR 405. The Bombay, Calcutta and Madhya Pradesh High Courts have also taken the same view. The Bombay High Court in the case CIT v. Deorao Shrawan Maundekar [1988] 169 ITR 19, speaking through Bharucha J. (as his Lordship then was), expressly dissented from the judgment under appeal before us and preferred to follow an earlier judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 1499, the question was whether the Munsif who was trying a suit under the U. P. Agriculturists Relief Act ceased to have jurisdiction after the passing of the U. P. Zamindari Abolition and Land Reforms (Amendment) Act, 1953, which conferred jurisdiction on the Assistant Collector. This court held that the jurisdiction of the Assistant Collector was itself created by the Abolition Act and as there was no provision in that Act that the pending cases were to stand transferred to the Assistant Collector for disposal, the Munsif continued to have jurisdiction to try the suit. It was observed that the provisions for change-over of proceedings from one court to another are commonly found in a statute which takes away the jurisdiction of one court and confers it on another in pending actions. Surely the Amending Act does not show that the pending proceedings before the court on reference abate. We are thus of the considered view that the advisory opinion given by the High Court on the question referred to it was wrong and the answer should be in favour of the appellant and it is held that the Inspecting Assistant Commissioner to whom the case was referred prior to April 1, 1971, had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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