Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 [as it stood before 1-04-1968] - Penalty - For concealment of income - Assessment year 1967-68 - assessee filed original return on 3-10-1967 declaring income of Rs. 5,734 and revised return on 25-05-1970 declaring income at Rs. 3,242 - Search at assessee's premises revealed concealment of certain unexplained investments - Filled another revised return declaring income at Rs. 19,374 including surrendered sum of Rs. 13,000 - ITO levied penalty of Rs. 13,000 - Whether tribunal justified in holding that provisions of section 271(1)(c) as amended in 1968, would apply - Held, no Facts For the assessment year 1967 68, the assessee initially filed two returns - first return on 3-10-1967 showing an income of Rs. 5,734 and a revised return on 25-05-1970 declaring an income of Rs. 3,246. During the previous year, the Central Excise Department searched the assessee's premises and recovered there from gold, silver, silver ornaments and cash. Confronted with, the seized material, the assessee filed still another return on 1-1-1971 showing the income at Rs. 19,734, including surrendered amount of Rs. 13,000 representing value of unexplained investments. The ITO, however, completed the assessment on 30-06-1971 at an income of Rs. 20,000 and levied a penalty of Rs. 13,000 by applying section 271(1)( c), as it stood amended by the Finance Act, 1968, with effect from 1-04-1968. Both the AAC and the Tribunal upheld the penalty order. On reference: Held 1. The relevant return for purposes of imposition of penalty under section 271(1 )(c) was the original return. 2. There was no merit in the revenue's contention that, if the revised return was held to relate back to the date of the original return, the department would be deprived of the advantage of the extended period of limitation granted under section 153(1)( c). The question of limitation had to be decided on the express language of section 153(1)( c). The latter indicated by using the word "whichever is latest" that, for purposes of calculating the limitation, the factual date of filing the return or revised return under section 139(4) or (5) had to be considered. It was settled…

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