JUDGMENT
S.C. Mohapatra, J.
1. At the instance of the Department/a statement of the case was called for from the Tribunal on the following question of law arising out of the order :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalty under Section 271(l)(c) for the year ?”
Since all these references are in respect of the same assessee, they were heard together and are disposed of by this judgment.
2. The same question in another form was referred by the Tribunal to this court which has been answered in the decision in CIT v. Dhadi Sahu [1976] 105 ITR 56 (Orissa). Admittedly, the said decision is against the Department. Statements in these cases were called for on the ground that the correctness of the said decision was pending in the Supreme Court.
3. Mr. S. C. Ray, learned Advocate-General and standing counsel for the Income-tax Department, submitted that the Supreme Court has not yet decided the matter.
4. There is no necessity to keep the reference pending awaiting the decision of the Supreme Court. It is true that imposition of penalty by the Inspecting Assistant Commissioner in view of the amendment of the Act is without jurisdiction as held by this court in the decision in CIT v. Dhadi Sahu [1976] 105 ITR 56 (Orissa). However, there is no dispute about the validity of the initiation of proceedings. Where a proceeding has been validly initiated but has been disposed of by an officer having no jurisdiction, the proceeding itself does not come to an end. The same is to be finalised by the officer having jurisdiction. Therefore, while accepting the decision of the Tribunal with regard to the cancellation of the imposition of penalty by the Inspecting Assistant Commissioner, as held by the Tribunal, we are inclined to hold that the proceeding has not yet, been finalised until the Income-tax Officer who has jurisdiction finally disposes of the proceeding.
5. Mr. R. Sharma, learned counsel for the assessee, submitted that, in view of provisions of Section 275 of the Act, imposition of penalty has
become barred by limitation. We need not express our view in that regard at this stage since such a question has not been referred to us. The Income-tax Officer is free to take into consideration Section 275 of the Act
while finalising the proceeding.
6. In view of the aforesaid discussion, while answering the question in the affirmative and against the Revenue, we clarify that the proceeding has not yet culminated and its to be brought to an end by the Income-tax Officer who shall also follow the decision of the Supreme Court if it comes by the time of disposal.
7. No costs.
J. M. Mahapatra, J.
8. I agree.