Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 [Corresponding to section 28(i)(c) of the Indian Income-tax Act, 1922] – Penalty – For concealment of income – Assessment years 1962-63 and 1965-66 – Whether relevant date for purposes of determining whether a person has committed an act which attracts penalty under section 271(1)(c) is date on which return in which information regarding his income liable to tax is withheld is filed or date when inaccurate particulars are given by him and year of assessment in respect of which return is filed or inaccurate particulars are furnished would have no relevance - Held, yes – Whether, therefore, where return was actually filed after 1-4-1968, and in course of assessment proceedings ITO found that assessee had concealed particulars of his income, penalty under section 271(1)(c) was leviable in accordance with law in force on date on which return was filed, i.e. Act as amended by Finance Act, 1968 - Held, yes FACTS The assessee had filed the returns for the relevant assessment years after 1-4-1968. In the course of the assessment proceedings the ITO felt satisfied that the assessee had concealed the particulars of certain income derived by it during the previous year. He therefore, referred the matter to the IAC who was of the opinion that penalty was leviable in accordance with the provisions of the Act as amended by the Finance Act of 1968 which came into force on 1-4-1968, and levied a penalty. The Tribunal upheld the plea of the assessee that the penalty leviable in the instant case was the penalty which could have been imposed according to the provisions in force at the commencement of the assessment year and the provisions of the Act as amended by the Finance Act, 1968, were inapplicable to the case. On reference : HELD It is now well settled that the proceedings under section 271(1)(c ) are penal in character. It is the basic concept of law that an act would be an offence attracting a penalty only when the law in force when the act is committed declares that such an act would be an offence and that, ordinarily, the penalty imposable for committing such an act would be in accordance with the law in force on the date of…

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