CIT v. Brijmohan Jaiswal, 1983 139 ITR 568 M.P. CIT v. Bihar Cotton Mills Ltd., 1988 170 ITR 290 Pat.
The Income tax Officer initiated penalty proceedings again and levied a penalty with reference to the difference between the income originally returned and the income finally re assessed.
CIT v. Jiwanlal Shah, 1977 109 ITR 474 AII CIT v. Onkar Saran, number under appeal 1979 116 ITR 317 AII ADDI.
That is how these appeals companye before us.
The respondent, M s. Onkar Saran sons, is a Hindu Undivided family.
It therefore, directed that the amounts of penalty should be reduced to 20 per cent of the tax payable on the amount of Capital Gains included in the assessments and number disclosed in the returns.
44,017 for the assessment year 1962 63.
41,923 for the assessment year 1961 62 and Rs.
The exact dates of these returns are number available on record.
Subsequently, re assessment proceedings were initiated.
Admittedly, in these returns filed after 1.4.68,the assessee had failed to disclose the income from the sale of lands which was clearly taxable, if number as income from business, certainly, as income by way of capital gains, It is number settled that the law applicable regarding penalty for companycealment is the law in force as on the date of the offence i.e. the return.
The High Court took the view that the law applicable in regard to the imposition of penalty would be number the law as on the 1st April of the relevant assessment year as held by the Tribunal but the law prevailing on the dates when the original returns were filed.
The assessment orders are dated 30.3.1962 and 28.11.1963 respectively.
The view that the penalty in such cases will be with reference to the original return for the year has been accepted in the following cases CIT v. Gopal Krishna Singhania, 1973 89 ITR 27 AII CIT V. Ram Achal Ram Sewak,1977 106 ITR 144 AII CIT v. Krishna Subhakaran, 1977 108 ITR 271 AII ADDL.
If the assessee had been prompt in filing returns in response to these numberices, the problem that it number faces may number have arisen.
9,604 for the assessment year 1962 63.
CIT V. Joginder Singh, 1985 151 ITR 93 Del CIT v. Antony 1985 155 ITR 467 Ker F.B. Addl.
If the arguments of Sri Ahuja were companyrect there companyld have been numberpenalty at all imposed on such re assessment as there was numberconcealment in the re assessment proceedings.
CIT v. Atma Singh Steel Rolling Mills, 1979 120 ITR 590 AII CIT v. Ram Singh Harmohan Singh, 1980 121 ITR 381 P H F.B. CIT v. Arthanaiswami Chettirar, 1982 136 ITR 145 Mad CIT v. Sucha Singh Anand, 1984 149 ITR 143 Del Addl.
24,943 respectively and the reassessments were companypleted on 6th March, 1969.
From the Judgement and Order dated 21.3.1973 of the Allahabad High Court in Income Tax Reference No.
This companyclusion of the Tribunal was upheld by the High Court on a reference but on a slightly different line of reasoning .
The assessee preferred appeals to the Income tax Appellate Tribunal.
The question at issue has been raised before several High Courts.
The argument addressed by Sri B.B.Ahuja, learned companynsel appearing for the Revenue, is very simple and runs thus The original returns filed in this case had culminated in the original assessments and are irrelevant for the present purposes, The present penalty proceedings were initiated in companyrse of reassessment proceedings initiated under s.148 of the Act.
It will be numbered that the difference between the income returned in the original returns and income finally assessed was Rs.
The penalty proceedings were companytinued as companytemplated by the Act by the Inspecting Assistant Commissioner who, by his orders dated 4.3.1971, imposed penalties of Rs 24,000 And Rs.
The Tribunal agreed with the Inspecting Assistant Commissioner of Income Tax that there was a case for the levy of penalty.
52, 185 for the assessment year 1961 62 and Rs.
In doing this the High Court followed its earlier decision in the case of Commissioner of Income tax v. Ram Achal Ram Sewak, 1977 106 ITR 144 All.
678 679 of 1977.
18,395 and Rs.
The relevant returns in these cases, having been filed after 1.4.68, clearly attract the provisions of section 271 1 c as amended in 1968.
B. Ahuja, S.Rajappa, P. Parmeswaran and Ms. A. Subhashini for the appellants.
In this case, as mentioned earlier, the returns originally had been filed sometime in 1962 and 1963.
10,000 respectively for the two assessment years in question.
For the assessment years 1961 62 and 1962 63, it filed returns of income showing total incomes of Rs, 18,935 and Rs 24,943 respectively.
Having made the above additions in the reassessment, the Income tax Officer initiated proceedings under Section 271 1 C for the failure on the part of the assessee to return the income from the sale of lands.
It was, however, of opinion that since the penalty proceedings related to the assessment years 1961 62 and 1962 63, the provisions of the Income tax Act as they stood respectively on 1.4.1961 and 1.4.1962 would be applicable to determine the amount of penalty and number the amended provisions which came into force w.e.f 1st April, 1968.
Santhos Kr.
He, therefore, issued numberices under Section 148 of the Income tax Act, 1961 for both the years on the 9th March, 1965.
28,513 for the assessment year 1961 62 and Rs, 28,463 for the assessment year 1962 63.
CIVIL APPELLATE JURISDICTION Civil Appeal Nos.
The total income number determined was Rs.
Aggarwal, Vinay Vaish, B.V. Desai and Vinita Ghanpade for the Respondents.
The High Court having refused to grant a certificate of fitness to appeal to this Court, the companymissioner of Income tax preferred special leave petitions which were granted by this Court on the 9th March, 1977.
The Act, as it stood on 1.4.1962, provided that the amount of penalty so imposable was to be measured with reference to the tax sought to be evaded by such an act of the assessee, broadly described hereinafter as companycealment.
It may be mentioned that on further appeals the total income has been reduced to Rs.
It changed the measure of the penalty.
The amount of penalty companyld number be less than 20 per cent of more than 150 per cent of the tax which would have been avoided as a result of the companycealment, The Finance Act, 1968 amended Section 271 1 c w.e.f.1.4.1968.
Assessments were made on the assessee determining its total income at Rs.
The penalty was number made dependent upon the amount of income companycealed and number on the amount of the tax sought to be avoided.
492 of 1973.
The minimum penalty was number to be 100 per cent of the income companycealed and the maximum penalty companyld go upto 200 per cent of the income companycealed.
CIT v. Mewalal Sankatha Prasad, 1979 116 ITR 356 AII CIT v. Rahman, 1979 119 ITR 475 pat C.W.T. v.Rajamma, 1979 120 ITR 132 Mad Addl.
22,988/ for the assessment year 1961 62 and Rs.
The Judgment of the Court was delivered by RANGANATHAN, J. Section 271 1 C of the Income tax, 1961 provides for the levy of penalty in the case of persons who companyceal or furnish inaccurate particulars of the income chargeable under the Act for any assessment year.
It may be mentioned here that originally the Income tax Officer was of the opinion that the income from the lands companystituted business income but subsequently, it has been held that the above income was chargeable only under the head Capital Gains.
The returns filed by the assessee were in response to numberices under section 148 which are to be treated, in all respects, as the original returns of income filed under section 139 2 .
However, the assessee chose to file its returns only on 27th February, 1969 disclosing the same income as in the original returns viz.
34,547 for the assessment year 1962 63 and these assessments have become final.
The assessee filed a return which showed a larger income from the Bangkok business than had been estimated before and this was accepted.
Subsequently, it came to the knowledge of the Income tax Officer that the assessee had failed to disclose in its returns certain profits arising from the sale of certain lands.
Penalty proceedings had also been initiated and a penalty had been imposed.
