TMI Blog1975 (12) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), was issued, and in answer thereto, the assessee filed the revised returns on November 26, 1969, March 24, 1970, and March 24, 1970, for the respective assessment years mentioned above. In these revised returns, the assessee included the income which accrued to him from the picture house of which he was the owner, and which cinema theatre he had leased to M/s. Merla China Veeranna and others from June 27, 1958, for ten years. The revised returns were accepted by the Income-tax Officer on October 22, 1970 ; nevertheless, be initiated proceedings for the levy of penalty. Since the minimum penalty leviable, according to the Income-tax Officer, was more than Rs. 1,000 for each assessment year, he referred the penalty proceedings under section 271(1)(c) of the Act to the Inspecting Assistant Commissioner of Income-tax who by his separate orders dated March 22, 1973, for each of the assessment years, levied a minimum penalty of Rs. 1,810 per year. The reason assigned by the Inspecting Assistant Commissioner was that it was a clear case of omission, on the part of the assessee, to disclose the income from the cinema the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income." After April 1, 1968, section 271(1)(c)(iii) provided: " (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 furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,--... (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished." Mr. P. Rama Rao, the learned standing counsel for the revenue, contends that the Appellate Tribunal fell into error in holding that the offence of concealment was committed at the time of filing the original returns and, therefore, the law as it stood on that date should be applicable. He submits that although penalty proceedings are with respect to original returns, nevertheless, once reassess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 507 (All), Commissioner of Gift-tax v. C. Muthukumaraswamy Mudaliar [1975] 98 ITR 540 (Mad), Commissioner of Income-tax v. Bhan Singh Boota Singh [1974] 95 ITR 562 (Punj), Commissioner of Income-tax v. K. Ahamed [1974] 95 ITR 599 (Ker) [FB], Karimtharuvi Tea Estate Ltd. v. State Of Kerala [1966] 60 ITR 262 (SC), Rajputana Stores v. Inspecting Assistant Commissioner of Income-tax [1975] 99 ITR 499 (Gauhati), Continental Commercial Corporation v. Income-tax Officer [1975] 100 ITR 170 (Mad), Fairdeal Motors v. Commissioner of Income-tax [1975] 101 ITR 687 (J K), Shakti Offset Works v. Inspecting Assistant Commissioner of Income-tax [1967] 64 ITR 637 (Bom) and Commissioner of Income-tax v. Vedlapatla Veera Venkataramiah [1943] 11 ITR 308 (Mad). He further submitted that the rulings relied upon by Mr. Rama Rao have no relevancy to the facts of this case because both the Supreme Court and the Bench of this court were interpreting the provisions of section 297(2)(g) in those cases, and section 297(2)(g) specifically provided that the law as it stood on the completion of assessment should be the law applicable. Therefore, he submits that in those rulings, due to the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the offender. In other words, penalty for infraction takes place not when it is detected but when it actually has been committed. To illustrate in a concrete form, for the assessment year 1968-69 if two different assessees file their returns on the same day and for some administrative reasons, the Income-tax Officer completes one assessment in 1971 and the other in 1972, and on completion of the two assessments, the Income-tax Officer is satisfied that concealment of income has been committed by the two assessees, would the Income-tax Officer be justified in levying the penalty as it stood in 1971 in the case of one assessee and the penalty as it stood in 1972 in the case of the other, when the offence of concealment has taken place on one and the same day. Our answer is that it would not be proper for the Income-tax Officer or the Appellate Assistant Commissioner to adopt such a course when it is not so expressly or by necessary implication provided in the Act because the element of certainty is an important factor in penalty proceedings. Hence, to our mind, it is not possible to cull out from the wording of section 271(1)(c) that the date of satisfaction of the Income-tax off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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