Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 – Penalty – For concealment of income – Assessment year 1963-64 – Assessee filed return of income on 15-9-1964 – Since income returned was less than 80 per cent of assessed income, IAC held that onus of proof under Explanation to section 271(1)(c) which came into effect on 1-4-1964, laid upon assessee and since assessee failed to discharge said onus, he must be deemed to have concealed particulars of his income – Accordingly, IAC levied penalty under section 271(1)(c) – Tribunal cancelled penalty on ground that said Explanation had no application to instant assessment – Whether since offence was committed after Explanation to section 271(1)(c) had come into effect, penalty proceedings would be governed by said Explanation and, therefore, order of Tribunal was not justified – Held, yes FACTS The assessee filed the return of income for the relevant assessment year on 15-9-1964. The IAC levied the penalty under section 271(1)(c) on the ground that the income returned by the assessee was less than 80 per cent of the total income on which he was assessed to tax by the Income-tax Officer and the onus lay upon him under the Explanation to section 271(1)(c), to prove that his failure to return his correct income did not arise from any fraud or gross or wilful neglect on his part and that as he failed to discharge that onus of proof he must be deemed to have concealed the particulars of his income. The Tribunal cancelled the penalty on the ground that the said Explanation which was added with effect from 1-4-1964, had no application to the assessment for the assessment year in question. On reference: HELD The Explanation to section 271(1)(c) was added with effect from 1-4-1964. The return was filed on 15-9-1964, that is to say, after the introduction of the said Explanation to the Act. Therefore, after the said Explanation had been added, the assessee returned the income and committed the offence mentioned in the Explanation. The position in law is that in the case of an offence of this nature the law applicable would be as on the date when the act which made the offence is committed. As the offence was committed after the…

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