Law: Income Tax Act, 1961

Section: 271(1)(c)

(a) Income-tax-----Penalty---Law applicable to assessment---Concealment of income---Levy of penalty---Law applicable is that in force at the time of filing original return---Indian Income Tax Act, 1961, S. 271(1)(c). The law applicable for imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961, will be the law as in force at the time of the filing of the original return for the assessment year in question. CIT v. Onkar Saran & Sons (1992) 195 ITR 1 (SC) fol. (b) Precedent--- ---- Decision is an authority for what it decides and not what can be deduced therefrom---Decision of Supreme Court on point at issue---Binding on High Courts. A decision is an authority for what it decides and not what can logically be deduced therefrom. The decision in Jain Bros. v. Union of India (1970) 77 ITR 107 (SC) is not an authority for the interpretation of the provisions of section 271(1)(c). In CIT v. Onkar Saran & Sons (1992) 195 ITR 1 (SC), the point at issue had specially been dealt with and the High¬ Court was bound by the decision. Therefore, penalty under section 271(1)(c) is to be based on the law as on the date when the original return was filed. Brij Mohan v. CIT (1979) 120 ITR 1 (SC); CIT v. Bihar Cotton Mills Ltd. (1988) 170 ITR 290 (Pat.).; CIT v. Chatterjee (M.N.) (1988) 170 ITR 87 (Pat.); CIT v. Girish Kumar Kothari (1994) 208 ITR 775 (Pat.); Jain Brothers v. Union of India (1970) 77 ITR 107 (SC); Jalan Trading Co. (P.) Ltd. v. Mill Mazdoor Sabha (1966) 36 Comp. Cas. 901; 29 FJR 463 (SC) and Maya Rani Punj v. CIT (1986) 157 ITR 330 (SC) ref. JUDGMENT S.B. SINHA J.---This reference has been made to this Court under section 256(2) of the Income Tax Act, 1961, for answering the following questions: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the law applicable is the law as it stood on the date of filing of the return and not on the date of passing the penalty order and satisfaction about the concealment of income for the purpose of imposing penalty? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing calculation of penalty on the…

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