Legal Case Summary

Case Details
Case ID 4508e858-3952-42ae-a287-d269b3b13143
Body View case body.
Case Number Civil Appeal No. 3169 of 1984
Decision Date Apr 03, 1996
Hearing Date
Decision The Supreme Court ruled in favor of the Revenue, stating that the Inspecting Assistant Commissioner retained jurisdiction to continue penalty proceedings that were pending as of March 31, 1976, despite the deletion of subsection (2) of section 274 of the Income Tax Act, 1961. The Court emphasized that a change in law does not affect pending actions unless explicitly stated. It was determined that the principle of vested rights in the context of jurisdiction applies, allowing the Inspecting Assistant Commissioner to impose penalties in accordance with the law in effect at the time of reference. Previous contradictory views from the Karnataka High Court were overruled, affirming the authority of the Inspecting Assistant Commissioner to proceed with the penalty imposition.
Summary In the landmark case of Civil Appeal No. 3169 of 1984, the Supreme Court of India addressed critical issues surrounding the Income Tax Act, 1961, particularly focusing on the jurisdiction of the Inspecting Assistant Commissioner to levy penalties under section 271(1)(c) following legislative changes. The appeal, preferred against the Karnataka High Court's ruling, questioned whether the Inspecting Assistant Commissioner had lost jurisdiction due to the omission of subsection (2) of section 274. The Court held that pending actions remain unaffected by changes in law unless expressly stated, thereby allowing the Inspecting Assistant Commissioner to continue with penalty proceedings initiated prior to the amendment. This decision clarified the legal landscape surrounding income tax penalties and reinforced the concept of vested rights in procedural matters, ensuring that taxpayers' rights are preserved amidst legislative changes. It is a significant ruling that impacts how tax penalties are handled in India, providing clarity and direction for future cases involving the Income Tax Act.
Court Supreme Court of India
Entities Involved Not available
Judges B.P. Jeevan Reddy, Suhas C. Sen
Lawyers A Raghuvir, Senior Advocate, R. Satish, Advocate, S.N. Terdol, Advocate, S. Srinivasan, Advocate
Petitioners COMMISSIONER OF Income Tax
Respondents Smt. R. Sharadamma
Citations 1997 SLD 41, 1997 PTD 396, (1996) 219 ITR 671
Other Citations Abdul Azeez (R.) v. CIT (1981) 128 ITR 547 (Kar.), CIT v. Dhadi Sahu (1993) 199 ITR 610 (SC), Manujendra Dutt v. Purnendu Prosad Roy Chowdhury AIR 1967 SC 1419
Laws Involved Income Tax Act, 1961
Sections 271(1)(c), 274