TMI Blog1981 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of imposing penalty under that section ? " The question that had been recommended by the Commissioner for being referred to the High Court was : "On the facts and circumstances of the case, the Tribunal erred in ignoring the Explanation to section 271(1)(c) of the Income-tax Act and holding that the assessee could not be penalised for not declaring perquisite amounting to Rs. 1,500 and income from undisclosed sources amounting to Rs. 33,964 ?" The Tribunal noticed that the Commissioner was not challenging the conclusion of the Tribunal that no penalty was imposable by reference to the addition of the property income in the assessment. It felt that the question whether a penalty was called for in respect of the addition of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, again showing an income of Rs. 1,21,463 and the tax deducted at source and advance tax paid on income amounting to Rs. 91,477. The ITO, however, completed the assessment on March 20, 1968, determining a total income of Rs. 2,13,698. He also initiated penalty proceedings under s. 271(1)(c). As the minimum penalty leviable exceeded Rs. 1,000, the case was referred to the IAC. He took the view that inasmuch as the return had been filed by the assessee on November 22, 1967, by which time the word "deliberately " had been deleted from s. 271(1)(c) of the Act and an Explanation was added to that section, the assessee would be deemed to have concealed his income unless it was proved that the failure to return the correct income was not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271 of the Act as they stood before the amendment in 1964 should be considered for the purpose of imposing a penalty under that section for both the years ? " As the question of law is common in all the I.T. References, we are going to give only one opinion. As noticed earlier, the short question is whether s. 271(1), as amended in 1964, was attracted for the assessment years 1958-59, 1959-60 and 1963-64. Mr. Lalwani appearing for the Revenue contends that the offence was , ommitted when the revised returns were filed in 1967 in pursuance of notice issued to the assessee under s. 148 of the Act. Therefore, the law in force at that point of time would be the law which would govern the levy of penalty. Mr. Sharma appearing on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson can be punished only for that offence which was an offence under law on the date when the alleged offence was committed. In Balwant Singh's case [1981] 127 ITR 597 (MP), a Bench of the Madhya Pradesh High Court at Indore also took the same view. In this case the assessment year was 1959-60. The assessee had filed his return and the assessment had been completed. The ITO reopened the assessment for that year and issued notice to the assessee under s. 148 of the Act. In response to that notice the assessee filed another return on December 21, 1969, declaring an income of Rs. 5,000. The ITO, however, added an amount of Rs. 20,000 as the assessee's income from undisclosed sources. On appeal, the AAC reduced the addition to Rs. 11,000. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh returns on April 17, 1968. Penalties were imposed by the IAC for both the assessment years as returns filed even after notice under s. 148 were not accepted and assessments were made at higher figures. The Tribunal took the view on appeals by the assessee that the amending Act was not retrospective and that penalties could only be imposed on the basis of the default committed in the original return. The High Court on reference upheld this view. In CIT v. A. Rahman [1979] 119 ITR 475, a Bench of the Patna High Court took the same view as the Allahabad High Court that concealment occurred at the time when the original returns were filed and the relevant law would be the law in force at that time. Service of notice under s. 148 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is made. Therefore, the law visualises filing of more than one return prior to the completion of assessment if such an occasion arises. If the subsequent return/returns filed by the assessee only correct some omission or wrong statement inadvertently made or not made deliberately in the first return, it is the return on which the assessment is completed which would be relevant for the purpose of applicability of the relevant law for imposition of penalty. Otherwise, if there is any deliberate omission or mis-statement, it will be the very first return which would be relevant for imposition of penalty. We are fortified in taking this view by the decision in Amjad Ali Nazir Ali v. CIT [1977] 110 ITR 419 (All). In the present case, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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