TMI Blog1975 (5) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... e principle of Anwar Ali's case [1970] 76 ITR 696 (SC) even after the amendment of section 271 in 1964? 4. Whether, on the facts and the circumstances of the case, the Tribunal was justified in holding that the Inspecting Assistant Commissioner had no jurisdiction to impose penalties under section 271(1)(c) for the assessment years 1962-63, 1963-64, 1965-66, 1966-67 and 1967-68 and in setting aside his orders?" Five assessment years are involved in the references, namely, 1962-63, 1963-64, 1965-66, 1966-67 and 1967-68. The questions referred to us are, however, common. The assessee, Jiwan Lal Shah, was assessed as an individual in the aforesaid assessment years. He filed his returns for the said years but the returned incomes were not accepted and he was assessed on the estimated basis. The following chart gives the necessary details of the returned incomes and the assessed incomes: Assessment year Returned income Assessed income Rs. Rs. 1962-63 2,165 4,204 1963-64 2,500 4,204 1965-66 1,667 4,504 1966-67 1,500 4,904 1967-68 2,500 5,004 Subsequently, the Income-tax Officer concerned started proceedings under section 147 of the Income-tax Act, 1961, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of items of credits found to be his income for the various years and (ii) certainly to the extent of the interest that had accrued on these various deposits. He further held that the returns of income in pursuance of the notices under section 148 having been filed after April 1, 1968, the provisions of sub-section (1) of section 271 as amended on April 1, 1968, should be applied. He, therefore, imposed penalties equal to the amount of income concealed. He ignored the item of interest which had been shown in the returns under section 148 and restricted the penalty amount to the amounts of deposits treated by the Income-tax Officer as the incomes of the various years. The penalties imposed by him were as follows: Assessment year Amount of penalty Rs. 1962-63 16,000 1963-64 10,500 1965-66 21,900 1966-67 13,270 1967-68 3,000 It may be stated that the Inspecting Assistant Commissioner passed his orders in June, 1970, before the Appellate Assistant Commissioner disposed of the appeals preferred by the assessee against the reassessments. As has been stated above, the Appellate Assistant Commissioner and, thereafter, the Tribunal granted relief to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lties were calculated on the said basis, the minimum penalty imposable for every one of the years concerned would be less than Rs. 1,000 and, therefore, the jurisdiction to levy penalty under section 271(1)(c) would be that of the Income-tax Officer and not of the Inspecting Assistant Commissioner. The orders of the Inspecting Assistant Commissioner imposing penalty over different years in question, were, therefore, held to be without jurisdiction and the same were set aside. On the application of the Additional Commissioner of Income-tax, the aforesaid questions of law have been referred to us. Before answering these questions it will be convenient to notice the relevant legislative amendment introduced in section 271(1)(c). When the Income-tax Act, 1961, came into force section 271(1)(c) stood as under : 271. Failure to furnish returns, comply with notices, concealment of income, etc.-(1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person......... (c) has concealed the particulars of his income, or deliberately furnished inaccurate particulars of such income, he may direct that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the Explanation added by the Finance Act of 1964. However, the ratio would be equally applicable to the amendments introduced by the Finance Act of 1968. It was laid down that any one who files an incorrect return after April 1, 1964, is liable to be dealt with according to the amended provisions of section 271(1)(c) regardless of the year to which the return relates. It was further held: "It is true that penalty is also imposed in respect of a particular assessment year, but penalty proceedings are not part of assessment proceedings and, therefore, the principle that the law applicable under the Income-tax Act to a particular assessmeat year is the law prevailing on the 1st day of April of that year does not apply to penalty proceedings. In our opinion the law which will apply to penalty proceedings will be the law as it stands on the day on which the default is committed. Now, in cases of concealment or of furnishing inaccurate particulars the date of such default will be the date on which the return is filed irrespective of the assessment year to which it relates." However, despite our disagreement with the Tribunal, we agree with the Tribunal on the alternative gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id down in section 271(1)(c) still remains, namely, that there should have been a concealment of the particulars of the income or an inaccurate furnishing of such particulars. In Anwar Ali's case [1970] 76 ITR 696, 701 (SC) the Supreme Court laid down as under: "It must be remembered that the proceedings under section 28 are of a penal nature and the burden is on the department to prove that a particular amount is a revenue receipt. It would be perfectly legitimate to say that the mere fact that the explanation of the assessee is false does not necessarily give rise to the inference that the disputed amount represents income. It cannot be said that the finding given in the assessment proceedings for determining or computing the tax is conclusive. However, it is good evidence. Before penalty can be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. In the present case, it was neither suggested before the High Court nor has it been contended before us that, apart from the falsity ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
