Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Whether law relating to penalty applicable in a particular case would be those in force on the date of the original return in which income is concealed, irrespective of any return filed subsequently under section 139(5) or 148 in which the act of concealment may have been detected - Held, yes - Whether in cases where original returns concealing certain income were filed prior to 1-4-1968 and a revised return under section 139(5) or a return under section 148 was filed after 1-4-1968 repeating that concealment, the quantum of penalty leviable would be governed by provisions of section 271(1)(c) as it stood before its amendment with effect from 1-4-1968 - Held, yes Facts The two assessees, J and H, filed original returns for the assessment year 1967-68 prior to 1-4-1968. In the case of J, the original assessment was completed on 10-1-1969. Subsequently, the ITO issued a notice under section 148 for reassessment proceedings in response to which the assessee filed a return declaring the same income as in the original return. The ITO, however, completed the reassessment by making a certain addition. In the case of H, the original return filed on 1-9-1967 was followed by revised returns filed on 4-9-1968 and 20-11-1968. The ITO took the revised return dated 4-9-1968 into account while making the assessment and made an addition on account of certain income which had been disclosed only in the second revised return dated 20-11-1968. In the consequent penalty proceedings for concealment of income under section 271(1)(c) read with section 274(2), the IAC imposed penalties on both J and H of amounts equal to the amount of concealed income by invoking the provisions of section 271(1)(c ) as amended with effect from 1-4-1968. The Tribunal upheld the levy of the penalty in both the cases but held that since the concealment related to the assessment year 1967-68, the question of penalty would be decided as per the unamended provisions standing before 1-4-1968. On reference : Held It is well settled that the law relating to penalty is the law as it stands on the date of commission of the…

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