Law:

Section:

Section 271(1)(c) of the Income-tax Act 1961 - Penalty - For concealment of income - Assessment year 1964-65 - Whether for computation of penalty law in force on date on which act of concealment took place is relevant -Held, yes - Whether where penalty is sought to be levied for concealment of income, law to be applied is that in force when original return was filed and not that in force when a duplicate return with identical concealment of income is filed - Held, yes FACTS For the assessment year 1964-65, the assessee-firm filed its return on 10-8-1964. While making the assessment, the ITO requested the assessee to file a duplicate copy of the return and, accordingly, it furnished the duplicate return on 12-2-1969. The ITO found that the assessee had concealed income and, therefore, he initiated penalty proceedings under section 271(1)(c). The IAC imposed penalty applying the rate under the amended provisions of section 271(1)(c)( iii) which came into effect from 1-4-1968. On writ, the assessee challenged the rate of penalty applied in computing the minimum penalty. HELD The rate of penalty has to be applied as it stands at the time when the default which attracts penalty is committed. In other words, the crucial and relevant date is the date when an untrue return is filed involving concealment of income; and not as it stands in the financial year for which assessment is made, nor as it stands at the time the penalty proceedings are taken. Where penalty is sought to be levied for concealment of income, the law to be applied is that in force when the original return was filed and not that in force when the duplicate return with identical concealment is filed. In the instant case, the assessee had filed the original return on 10-8-1964 before the amendment to section 271(1)(c)(iii ). The amendment in question was not purely procedural, it had a bearing on the quantum of penalty. The law as it stood on 10-8-1964 will, therefore, apply for the computation of penalty. The authorities could not proceed on the basis of duplicate return filed. It was not the case that a revised return was filed by the assessee. By filing the duplicate return, the assessee did not…

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