B.N. Kirpal, J.
1. Under section 256(1) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal has stated the case and referred the following question of law to this court :
'Whether, on the facts and in the circumstances of the case and having regard to the provisions of section 274(2) as amended by the Taxation Laws (Amendment) Act, 1970, with effect from April 1, 1971, the Tribunal was right in law in holding that the Income-tax Officer had the jurisdiction to levy the penalty under section 271(1)(c) ?'
2. The facts, as found by the Tribunal, are that the assessed in an individual deriving income from the running of a hotel named as Agra Hotel, Darya Ganj, New Delhi. In respect of the assessment year 1968-69, he filed a return declaring income of Rs. 9,842. The assessment was, however, completed on an income of Rs. 26,374. Certain additions were made which resulted in the addition to the income returned. After assessment had been completed on April 6, 1973, the Income-tax Officer initiated penalty proceedings under section 271(1)(c) of the Act and, after hearing the assessed, he imposed a penalty of Rs. 13,642 on March 12, 1976.
3. An appeal was filed by the assessed to the Appellate Assistant Commissioner. It was contended that, as the return of income was filed on October 3, 1968, and the minimum penalty imposable exceeded Rs. 1,000, and in view of the provisions of section 274 which existed at the time when the income-tax return was filed, the penalty could be levied only by the Inspecting Assistant Commissioner and not by the Income-tax Officer. The further plea which was taken was that the penalty could only be imposed within a period of two years from the date of the assessment which already expired on April 6, 1975, and the penalty order which was passed on March 12, 1976, was barred by time. The Appellate Assistant Commissioner accepted the contentions of the assessed and allowed the appeal.
4. The Department filed a second appeal to the Income-tax Appellate Tribunal. It was, inter alia, contended that section 274 was a procedural provision and the law had been amended with effect from April 1, 1971, and thereafter it is the Income-tax Officer who had the jurisdiction to levy the penalty. This contention was accepted by the Tribunal who also held that the penalty was levied within the period of limitation and set aside the order and remitted the case to the Appellate Commissioner with a direction to decide the case with regard to the imposition of penalty on merits.
5. At the instance of the assessed, the Tribunal then referred the aforesaid question of law to this court.
6. It is not disputed that, with the amendment of section 274, if the difference the total income assessed and the income returned is less than Rs. 25,000, then the jurisdiction to levy penalty is with the Income-tax Officer. That section 274 is procedural in nature has been held by this court in the cases reported as CIT v. Kundan Lal : [1983]144ITR547(Delhi) and CIT v. Daropdi Devi : [1984]149ITR178(Delhi) . In both the cases, it was held that, if the concealment exceeds Rs. 25,000, then the jurisdiction to levy penalty would be with the Inspecting Assistant Commissioner, but if the concealment is less than that figure, then the jurisdiction would be with the Income-tax Officer. This was held to be so even with regard to the assessment years prior to April 1, 1971. In both the decisions, it was held that section 274 was procedural and, thereforee, any amendment made will be effective as far as procedure was concerned.
7. In the present case, the assessment was completed on April 6, 1973. It is thereafter that penalty proceedings were initiated. At that point of time, namely, April 6, 1973, section 274 had been amended. It is this amended provision which applies and it is only the Income-tax Officer who had jurisdiction to pass the impugned order of penalty. The Tribunal was, thereforee, right in holding that the order passed by the Income-tax Officer was within jurisdiction.
8. In view of the above, the aforesaid question of law is answered in the affirmative and in favor of the Department.
9. The respondent will be entitled to costs.