Law:

Section:

Section 28(1)(c) of the Indian Income-tax Act, 1922 [corresponding to section 271(1)(c) of the income-tax act, 1961]-Penalty-For concealment of income-In return for assessment year 1961-62, filed on 17-7-1961, assessee disclosed certain income but was assessed at higher figure-Eventually, penalty proceedings were initiated on 26-6-1970-Whether law applicable for ascertaining assessee's guilt of concealment was section 28(1)(c) of the 1922 act and not section 271(1)(c) of the 1961 Act-Held, on facts, yes-Whether since department failed to prove that there was intentional and deliberate concealment on assessee's part, no penalty was imposable on assessee-Held, on facts, yes Facts The assessee-firm carried on chitty business as well as banking business, but it did not maintain regular accounts in respect of the former. For the assessment year 1961-62, pertaining to its previous year ended 30-12-1960, is was assessed, in respect of its chitty business, on an income of Rs. 95,321 as against the returned income of Rs. 72,745. On 26-4-1968, the ITO proposed to reopen the assessment under section 147(a). During the pendency of this proposal, the assessee filed a revised return on 31-5-1968 disclosing additional income from its chitty business. Subsequently, in response to a notice issued under section 148, it filed another return on the lines of the revised return. The ITO accepted this return on the basis of which reassessment was eventually completed. There after, on 26-6-1970, the ITO initiated penalty proceedings for concealment of income and referred the matter to the IAC who imposed penalty under section 271(1)(c). On appeal, the Tribunal held (i) that since the ITO had accepted the revised return, there could be no concealment in the reassessment proceedings and that the concealment, if any, could be only in the original return filed on 17-7-1961 ; (ii) that the case was governed by section 28(1)(c) of the 1922 Act and not section 271(1)(c) of the 1961 Act, as the latter had come into force only on 1-4-1962 ; and (iii) that since the assessee had no proper books of account, it could not establish certain particulars of its income but that would not prove that it…

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