JUDGMENT
[ENTITY], J. :
This is a reference under [SECTION] of the [ACT] (for short "the Act") at the instance of the CWT, Allahabad. The following question of law has been referred for the opinion of this Court :
"Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the IAC had no jurisdiction to pass the order of penalty under [SECTION] of the [ACT] on or after 1st April, 1976, i.e., the date from which his power to impose the penalty under [SECTION] of the [ACT] was taken away by the [ACT] ?"
2. This reference related to the asst. yrs. 1972-73 to 1974-75. Simultaneously with the completion of assessments the WTO initiated proceedings under [SECTION] of the Act. He referred the matters to the IAC under [SECTION] as it stood at the relevant time. The assessee was subjected to penalty of varying amounts from all these years by the IAC by his three separate orders passed under [SECTION] of the Act. In appeal before the ITAT the assessee took up a preliminary objection that the orders of penalty were without jurisdiction and, therefore, void ab initio, inasmuch as, on 28th October, 1977 the IAC was not the "competent authority" to pass the impugned penalty orders because of the amendment brought about in [SECTION] of the Act w.e.f. 1st April, 1976 by the [ACT]. The ITAT upheld the preliminary objection and allowed the appeals of the assessee by deleting the penalties for all these years. It is in this background that the question, set out above, has been referred for the opinion of this Court.
3. In [PRECEDENT] this Court had an occasion to consider somewhat similar controversy which arose under the corresponding provisions of [ACT]. In that case the ITO had initiated proceedings under [SECTION] of the [ACT] and referred the matter to the IAC under [SECTION] of that Act. Before the penalty could be imposed by the IAC [SECTION] of the [ACT] had been amended and the jurisdiction of the IAC to impose the penalty was taken away on the date when he passed the penalty orders. In such a situation, this Court held that a Court or Tribunal deciding a matter must not only be possessed of jurisdiction initially but also be clothed with the power to decide the matter when the final order is passed. Thus, on the date when the IAC passed the final order, his jurisdiction to do so had been taken away by the amendment is [SECTION] of the Act. In such situation, the order passed by him was held to be without jurisdiction. The principle enunciated in the case of [PRECEDENT] (supra) was followed and applied by this Court in cases, where the question for consideration was at to whether after omission of [SECTION] of the [ACT], w.e.f. 1st April, 1976 by the [ACT], the IAC was competent to pass the penalty orders in respect of the cases in which reference had been made to him by the ITO prior to 1st April, 1976. The view taken was that the IAC having lost the jurisdiction was not competent to pass any penalty order in such cases. In this connection we may refer to the decision of this Court in [PRECEDENT] and [PRECEDENT]. In the last mentioned case, it was held that by the amendment brought about by the [ACT] the legislative intention was to destroy the continuance of the power of the IAC even in respect of the matters which had already been referred to him by the ITO prior to April, 1976 and the IAC had no jurisdiction to pass the penalty order under [SECTION] of the [ACT] on or after 1st April, 1976.
4. The allied provisions of the [ACT] referred to above, are analogous to the provisions under the [ACT], with which we are concerned in this reference. By the [ACT], w.e.f. 1st April, 1976, the IAC had ceased to be the "competent authority" to pass any penalty order, after the said date with reference to the penalty imposable on an assessee under [SECTION] of the Act. The rule of law laid down in the cases referred to hereinabove, is equally applicable to the case in hand.
5. As in the instant case the penalty orders were passed by the IAC on 28th October, 1977, i.e., after the date he ceased to be the "competent authority" and was divested of the jurisdiction in view of the amendment made by the [ACT], w.e.f. 1st April, 1976, in our opinion, the IAC had no power to pass the impugned penalty orders under [SECTION] of the [ACT].
6. A similar view has also been taken by a Division Bench of Orissa High Court in [PRECEDENT]. In that case, the WTO had initiated penalty proceedings against the assessee for the asst. yrs. 1968-69 to 1972-73 under [SECTION] of the Act. He referred the matter to the IAC to impose penalties on the assessee for each of those years. In appeal before the Tribunal, the assessee contended that in view of the amendment by the [ACT], w.e.f. 1st April, 1976, the IAC had no jurisdiction to impose the penalty as the order had been passed in March, 1977. The Tribunal accepted the contention of the assessee and cancelled the penalties. On reference, affirming the decision of the Tribunal, it was held that the IAC ceased to have jurisdiction to pass the orders of penalty.
7. In view of the above discussion, we answer the question in the affirmative, in favour of the assessee and against the Department. The assessee shall be entitled to its costs which we assess at Rs. 250.