TMI Blog1979 (7) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... ria on 7th Feb.,1970 with the Shahukara Bank. The cost of the toria pledged with the bank was shown at Rs. 15,360. The assessee was called upon to explain the source of investment. At the first instance, the assessee explained that the said toria had actually belonged to M/s. Kultar Singh Bros. and that had been brought to the assessee for sale. The ITO did not accept the explanation of the assessee and he treated the income of Rs. 15,360 as income of the assessee from the undisclosed sources. The addition was accordingly made and the proceedings for concealment of income were initiated under s. 271(1)(c). In the quantum appeal preferred to the Act, the assessee changed its stand and stated that the toria in question had belonged to one S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses where minimum penalty impossable did not exceed the limit of Rs. 25,000. Shri Prem Singh relied on Continental Commercial Corporation vs. ITO(1) and Another and CIT vs. Bhan Singh Boota Singh(2) in support of his case. The Revenue relied on CIT, Orissa vs. Dhadi Sabu.(3). The matter is issued is fully clinched by the decision of the Madras High Court in 100 ITR 170 in favour of the assessee. If the decision or Orissa High Court is followed then the question will be answered in favour of the Revenue. The question for consideration is as to which of the authorities is to be accepted. Our task is made easier by the decision of Punjab High Court in the case of Bhan Singh Boota Singh(2) which tilts the scale in favour of the assessee. Though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Punjab and Haryana High Court is that the law as obtaining on the date of filing of return when the offence of concealment is committed, will be applicable. Similar view was taken by the Madras High Court in 100 ITR, 170. The authority of Madras High Court in 100 ITR 170 which directly deals with the matter in issue being in conformity with the decision of Punjab and Haryana High Court (95 ITR 562) in whose jurisdiction we are acting, has to be accepted as compared to the Orissa High Court. We, therefore, hold that the jurisdiction to levy penalty was with the IAC and not with the ITO and the latter having exercised jurisdiction illegally, the entire penalty proceedings are vitiated. We, therefore, cancel the penalty wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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