TMI Blog1973 (7) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances of the case, the Appellate Tribunal is correct in law in holding that the Explanation to section 271(1)(c) of the Income-tax Act, 1961, is not applicable to this case?" This question has been referred to us by the Income-tax. Appellate Tribunal, Cochin Bench, at the instance of the Commissioner of Income-tax. The year of assessment is 1963-64. The assessee contended that before March 31, 1963, he had filed a return of the income assessable for the year of assessment 1963-64. The only return available in the records of the case was the one filed by him on September 8, 1966. This return related to the income that is to be assessed for the year 1963-64 is not disputed. The Tribunal has proceeded on the basis that this is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the assessees and against the department." This conclusion reached by this court in I.T.R. No. 38 of 1970 requires re-consideration. We do not think that the matter had been discussed with reference to the statutory provisions and the principles applicable. We are inclined to think that the judgment in I.T.R. No. 38 of 1970 was rendered per incuriam. There is no question of the Explanation being retrospective in case it is applied to an act or omission committed after the coming into force of the Explanation. The only question is whether the act or omission took place after the Explanation was introduced in the statute book. The proceeding under section 271 is a separate proceeding, penal in nature, as has been laid down by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice of the Madras High Court, in the decision in Commissioner of Income-tax v. Vedlapatla Veera Venkataramiah. The same view has been taken by the Punjab and Haryana High Court in I.T.R. No. 45 of 1971. We consider that the proper procedure to adopt would be to refer the case to a Full Bench as the decision in I.T.R. No. 38 of 1970 which was also rendered by a Division Bench, is directly opposed to the view that we are inclined to take now. We refer the case to a Full Bench for decision. JUDGMENT OF THE FULL BENCH The judgment of the court was delivered by GOVINDAN NAIR, Actg. C.J.-This tax referred case has come up before the Full Bench on an order of reference by a Division Bench dated 28th November, 1972. The reference was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment was completed fixing the total income at Rs. 65,570. The income returned was, therefore, less than 80 per cent. of the total income assessed. The Explanation to section 271 (1)(c) was thus directly attracted. This means that it must be presumed that the assessee had furnished inaccurate particulars of his income, unless he established that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part. The act of furnishing inaccurate particulars had taken place after the amendments were introduced to the section. Imposition of penalty by the Inspecting Assistant Commissioner was, therefore, justified. The Tribunal held that the amended section would not apply because the year o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Madras High Court, in Commissioner of Income-tax v. Vedlapatla Veera Venkataramiah. Whether an act or omission is an offence must be determined with reference to the law at the time of the commission of the act or omission. In the light of the above, we overrule the decision in I.T.R. No. 38 of 1970. The correct principle is that laid down in the decision in I.T.R. No. 71 of 1968. We, therefore, answer the question that has been referred to us in the negative, that is, in favour of the department and against the assessee. We direct the parties to bear their respective costs. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be forwarded to the Appellate Tribunal, Cochin Bench. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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