1975-VIL-464-ALH-DT

Equivalent Citation: [1977] 108 ITR 271

ALLAHABAD HIGH COURT

Date: 03.02.1975

ADDITIONAL COMMISSIONER OF INCOME-TAX, LUCKNOW

Vs

KRISHNA SUBH KARAN

BENCH

Judge(s)  : C. S. P. SINGH., K. C. AGARWAL 

JUDGMENT

The judgment of the court was delivered by

C. S. P. SINGH J.--This is a reference under section 256(1) of the Income-tax Act, 1961, of the following question by the Income-tax Appellate Tribunal, Allahabad :

" Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that clause (iii) of sub-section (1) of section 271 of the Income-tax Act, 196 1, as substituted by the Finance Act, 1968, was not retrospective in effect and as such not applicable to the assessment years 1960-61 and 1961-62, even though the revised returns were filed after April 1, 1968 ? "

The facts leading up to this reference fall within a narrow compass. Two assessment years, viz., 1960-61 and 1961-62, are involved in the present reference. Returns for the assessment years 1960-61 and 1961-62 were filed by the assessee on June 9, 1960 and June 17, 1961, respectively. Assessments of these years were completed and, thereafter, in the course of proceedings for the assessment year 1963-64, the Income-tax Officer got information that certain drafts had been purchased by the assessee in different names from the United Bank of India, Allahabad, and remitted to Calcutta, which transactions were not shown in the books of account. As a consequence, the assessment for these two years were reopened and in response to notices under section 148 of the Act, the assessee filed returns on April 17, 1968. The assessee filed returns, which were not accepted and assessment was made at a higher figure. Penalty proceedings were thereafter initiated under section 271(1)(c) of the Act, and inasmuch as the minimum penalty imposable exceeded Rs. 1,000, the matter was taken up by the Inspecting Assistant Commissioner. The Inspecting Assistant Commissioner by his order dated February 20, 1971, and February 22, 1971, imposed penalties of Rs. 10,000 and Rs. 17,000, respectively, for the two years in question. On appeal, the Tribunal held that the charge of concealment of income had been established and, as such, the assessee was liable to penalty. It, however, held that the penalty was to be computed in accordance with the law as prevalent in the assessment years in question, and not as it stood amended in 1968, subsequent to which year the assessee had filed fresh returns in pursuance to notice under section 148. The question as to whether the law as amended in 1968 or the law as it prevailed earlier assumed significance, inasmuch as by the amendment the penalty had been raised to an amount equal to the concealed income, whereas previously it was fixed at 20% of the tax sought to be avoided. The Tribunal took the view that the amending Act was not retrospective and further that the penalty was imposable on the basis of default committed in the original returns. The question raised in this reference is covered by a decision of this court in Commissioner of Income-tax v. Rain Achal Ram Sewak [1977] 106 ITR 144 (All), wherein it has been held that the relevant return for the purposes of penalty proceedings is the original return filed by the assessee and not the return filed subsequently in pursuance to a notice under section 148 of the Act. As at present advised, we see no good ground for taking a contrary view. This being so, penalty was imposable at the rate as prevailing in the year in question, and not at the rate introduced by the Amending Act of 1968. We, therefore, answer the question in the affirmative and against the department. The assessee is entitled to his costs which we assess at Rs. 200. Counsel's fee is assessed at the same figure.

 

 

 

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