1974 (4) TMI 10

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..... ssee, M/s. India Hotel, Nainital, was assessed to income-tax on 16th August, 1966. The ITO formed an opinion that as the assessee had concealed the particulars of its income and had furnished inaccurate particulars thereof, minimum amount of penalty imposable upon it was Rs. 1,000. Accordingly, as required by s. 274(2) of the I.T. Act, he referred the case to the IAC for imposing such penalty as he thought proper. It appears that while the penalty proceedings were pending before the IAC, the assessee filed an appeal against the assessment order dated August 16, 1966. The AAC allowed the appeal filed by the assessee in part and reduced its taxable income by a sum of Rs. 3,000. Consequently, the minimum penalty imposable on the assessee came .....

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..... penalty imposable exceeded Rs. 1,000 the ITO had to refer the case to the IAC, who, for the purposes, had all the powers for the imposition of penalty. A reading of these two sections clearly indicates that under the law, as it then stood, the IAC acquired jurisdiction to impose penalty in cases falling under cl. (c) of s. 271(1) when a reference for the purpose was made to him by the ITO concerned. Once the reference was made, the IAC became seized of the matter and acquired all the jurisdiction to deal with the question of penalty which could be imposed on the assessee. We are unable to agree with the Tribunal's view that, according to s. 274 of the Act, the primary condition that the minimum amount of penalty imposable on the assessee ex .....

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..... to imposition of penalty by the IAC, the assessee became entitled to claim some relief in respect of the penalty imposed upon him, he could get his grievance redressed by filing an appeal against the penalty order. Aforesaid view expressed by us is further supported by a subsequent amendment made in s. 274(2) of the I.T. Act. Relevant portion of the amended s. 274(2) of the Act runs thus: " Notwithstanding anything contained in clause (iii) of sub-section (1) of section 271, if in a case 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 been furnished ...... the Income-tax Office .....

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