9911796707
TMI Blog1992 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... measure of the penalty. The penalty was now made dependent upon the amount of income concealed and not on the amount of tax sought to be avoided. The minimum penalty was now to be 100 per cent. of the income concealed and the maximum penalty could go up to 200 per cent. of the income concealed. This amendment has substantially stepped up the amount of penalty that could be levied in cases of concealment. It is the applicability of this amendment which is in issue in these appeals. The respondent, Onkar Saran and Sons, is a Hindu undivided family. For the assessment years 1961-62 and 1962-63, it filed returns of income showing total incomes of Rs. 18,935 and Rs. 24,943 respectively. The exact dates of these returns are not available on record. Assessments were made on the assessee determining its total income at Rs. 28,513 for the assessment year 1961-62 and at Rs. 28,463 for the assessment year 1962-63. The assessment orders are dated March 30, 1962, and November 28, 1963, respectively. Subsequently, it came to the knowledge of the Income-tax Officer that the assessee had failed to disclose in its returns certain profits arising from sale of certain lands. He, therefore, issued n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "capital gains" included in the assessments and not disclosed in the returns. This conclusion of the Tribunal was upheld by the High Court on a reference but on a slightly different line of reasoning. The High Court took the view that the law applicable in regard to the imposition of penalty would be not the law as on the 1st April of the relevant assessment year (as held by the Tribunal) but the law prevailing on the dates when the original returns were filed. In this case, as mentioned earlier, the returns originally had been filed some time in 1962 and 1963. The High Court, therefore, held that the Tribunal's conclusion to scale down the penalty on the basis of the tax sought to be avoided was correct. In doing this, the High Court followed its earlier decision in the case of CIT v. Ram Achal Ram Sewak [1977] 106 ITR 144 (All). The High Court having refused to grant a certificate of fitness to appeal to this court, the Commissioner of Income-tax preferred special leave petitions which were granted by this court on March 9, 1977. This is how these appeals have come before us. The argument addressed by Sri B. B. Ahuja, learned counsel appearing for the Revenue, is very simple an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (Addl.) v. Gopaldas Amarnomal [1985] 151 ITR 114 (MP); CIT (Addl.) v. Brijmohan Jaiswal [1983] 139 ITR 568 (MP) and CIT v. Bihar Cotton Mills Ltd. [1988] 170 ITR 290 (Patna). It would, therefore, appear that the decisions of majority of the High Courts support the contention raised on behalf of the assessee that, even in a case where a return filed under section 148 involves an element of concealment, the law applicable for imposition of penalty will be the law as in force at the time of the filing of the original return for the assessment year in question and not the law as it stands on the dates on which returns in response to the notice under section 148 are filed. We have heard both counsel and also have been taken through the various decisions cited before us. We are of the opinion that the view taken by the majority of the High Courts is the more acceptable and more practical view. We do not wish to reiterate the reasoning given in these decisions. Suffice it to say that, among other decisions, the issue has been discussed at length in the decision of the Madras High Court in CIT v. S. S. K. G. Arthanariswamy Chettiar [1982] 136 ITR 145 (to which one of us-Ramaswamy J.-w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he arguments of Sri Ahuja were correct, there could have been no penalty at all imposed on such reassessment as there was no concealment in the reassessment proceedings. This court, however, upheld the imposition of the penalty with reference to the original return but it was observed that, if a penalty had been levied earlier in the course of the original assessment proceedings, that penalty order should be recalled and substituted by the new penalty order. The decision of the Madras High Court in Govindarajulu Iyer (C. V.) v. CIT [1948] 16 ITR 391, which was approved by the Supreme Court in Malbary (N. A.) and Bros.' case [1964] 51 ITR 295 also establishes the proposition that, even in the course of reassessment proceedings, a penalty could be imposed with reference to the concealment in the original assessment proceedings. (2) Recent decisions of this court in V. Jaganmohan Rao's case [1970] 75 ITR 373 (SC), and other cases indicate a view that, once an original assessment is reopened, the whole assessment proceedings for the year are thrown open for a fresh assessment. For all practical purposes, it is as if the original assessment order does not exist. Whether this principle ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
