TMI Blog1975 (12) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... were barred by limitation ? " The facts giving rise to this reference in brief are these : The assessee is a firm of two partners carrying on business of running a hotel and bar. It is registered under the Income-tax Act. For the assessment years 1966-67 and 1967-68, the assessee had to file returns of its income before September 30, 1966, and September 30, 1967, respectively. But the assessee-firm filed the returns for both the assessment years on October 29, 1969. The Income-tax Officer completed the assessments but initiated penalty proceedings under section 271(1)(a) of the Income-tax Act, 1961, hereinafter referred to as the Act, for the default on the part of the assessee in not filing the returns within the time allowed by the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is reduced by three months, the penalty leviable will not be less than what the Income-tax Officer has actually levied. The assessee further appealed to the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal held that the penalty proceedings as initiated by the Income-tax Officer were barred by limitation for the reason that the amendment to section 275 of the Act came into force on April 1, 1971, and since that amendment was not retrospective in operation, the penalty proceedings in question which related to the assessment years 1966-67 and 1967-68 were not covered by the amended section. The Tribunal also observed : " It was settled law ...... that the law governing the assessment was one which was in existence on the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter shall be passed-- (a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the Appellate Assistant Commissioner under section 246 or an appeal to the Appellate Tribunal under sub-section (2) of section 253, after the expiration of a period of-- (i) two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or (ii) six months from the end of the month in which the order of the Appellate Assistant Commissioner, or, as the case may be, the Appellate Tribunal is received by the Commissioner, whichever period expires later ; (b) in any other case, after the expiration of two years from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any financial year, must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment of that year, even if the assessment is actually made after the amendments came into force. In Continental Commercial Corporation v. Income-tax Officer [1975] 100 ITR 170 (Mad) where, for the assessment year 1970-71, the assessee filed the return on 22nd December, 1970, the Income-tax Officer included Rs. 4,000 as income from undisclosed sources by his order dated January 25, 1973. Thereafter, penalty proceedings were initiated under section 271(1)(c), and the Income-tax Officer by his order dated October 9, 1973, levied a penalty of Rs. 4,000. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 922 Act on the date when the new Act of 1961 came into force. The cases of Munaga Peraiah v. State of Andhra Pradesh [1962] 13 STC 26 and Venkateswara Rao v. Dy. Commr. of Commercial Taxes [1959] 10 STC 162 were cases under the Sales Tax Act. To our mind, the contention advanced by Mr. Rama Rao cannot be acceded to in view of the settled law that any amendment in the Income-tax Act which comes into force after the first day of April of any financial year would not apply to the assessments of that year. Therefore, the amendment as introduced in section 275 of the Act on April 1, 1971, cannot be applicable to the penalty proceedings initiated for the late filing of the returns for the assessment years 1966-67 and 1967-68. Hence, the refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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