TMI Blog1978 (8) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... d reassessment, proceedings for levy of penalty in terms of s. 271(1)(c) of the Act was initiated on the 3rd October, 1968, and the penalty was levied by order dated the 1st of March, 1969. The assessee carried the matter in appeal to the Income-tax Appellate Tribunal, Patna Range, Patna, which relying upon several decisions of various High Courts, held that a proceeding for levy of penalty for concealment of income being a penal proceeding, the onus lay on the department to establish the assessee's guilt. The Tribunal then observed that-- " merely because the addition was maintained in the assessment proceedings, the assessee cannot be held to have concealed the particulars of his income or furnished inaccurate particulars of such income..." The penalty was, accordingly, deleted. The Tribunal having thus deleted the penalty, the reference in question has been made to this court at the instance of the CIT. The short argument made on behalf of the department is that the Tribunal, while deleting the penalty, had lost sight of the Explanation to s. 271(1) of the Act which had been introduced into the Act by the Finance Act, 1964, and took effect from the 1st of April, 1964. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the case in question. The said Explanation is in the following terms : " Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section. " This provision came into force from the 1st of April, 1964, shifting the burden of proof on the assessee in case its total income, as returned, was less than 80% of the total income assessed, as reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income, but which had been disallowed as deduction. There is no dispute that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e having undergone a change thereafter. Procedural laws, unless otherwise indicated, are retrospective in their application, applying to all proceedings pending on the date of their enforcement. The Explanation to s. 271(1) of the Act only prescribes a rule of evidence relating to burden of proof. It is purely procedural in nature. Naturally, therefore, irrespective of the date on which the offence was committed, it would be attracted if the proceeding for punishing the offender was pending on the date when it came into force. Learned counsel for the assessee has cited a number of decisions which, according to him, by implication hold that if the return of income is filed prior to April 1, 1964, namely, prior to the date on which the Explanation came into force, the Explanation will not apply to the case. The decisions cited are : Hajee K. Assainar v. CIT [1971] 81 ITR 423 (Ker), CIT v. K. Ahamed [1974] 95 ITR 599 (Ker) [FB], CIT v. Bhan Singh Boota Singh [1974] 95 ITR 562 (Punj), Rajputana Stores v. IAC [1975] 99 ITR 499 (Gau), CIT v. Data Ram Satpal [1975] 99 ITR 507 (All) and Continental Commercial Corporation v. ITO [1975] 100 ITR 170 (Mad). Except the Iast mentioned deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee which would attract the provisions relating to penalty. Whatever the stage, at which the satisfaction is reached, the scheme of sections 274(1) and 275 of the Act of 1961 is that the order imposing penalty must be made after the completion of the assessment. The crucial date, therefore, for purposes of penalty, is the date of such completion. " Thus, none of the above cited decisions help the assessee. On the contrary, the decisions in the cases of Bhan Singh Boota Singh [1974] 95 ITR 562 (Punj), Rajputana Stores [1975] 99 ITR 499 (Gauhati) and Data Ram Satpal [1975] 99 ITR 507 (All), go against its cause, because according to the decisions, the Explanation to s. 271(1) would get attracted, if irrespective of the assessment year in question, the return of income has been filed after the coming into force of the Explanation. In the instant case, admittedly, the return of income has been filed on the 8th February, 1966, after the coming into force of the Explanation. Learned counsel for the assessee, however, submitted that the return of income related to the reassessment proceeding. Another regular return of income had been filed much before the coming into force of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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