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Issues: Interpretation of penal provisions u/s 271(1)(c) of the Income-tax Act before and after amendment on April 1, 1968.
Summary: The High Court of BOMBAY considered two questions raised by the assessee regarding the imposition of penalties under section 271(1)(c) of the Income-tax Act. The case involved assessments for the years 1959-60 to 1962-63, where no concealment was found during the original assessment proceedings. However, upon reopening the assessments, it was revealed that there was concealment of income, leading to a dispute over the applicable penal provisions post the amendment on April 1, 1968. The Tribunal initially reduced the penalties imposed by the Inspecting Assistant Commissioner, prompting both the assessee and the Department to file miscellaneous applications due to discrepancies in the data presented. The Tribunal then revisited the issue, determining that the penal provisions post the April 1, 1968 amendment were applicable, leading to the current legal challenge. The assessee argued that penalties should be based on the law in force at the time of filing the original returns, citing relevant case law. Conversely, the Department relied on a different court decision supporting the application of post-amendment provisions. After thorough analysis, the High Court concluded that penalties should be imposed based on the provisions in place at the time of filing the original returns, i.e., before the April 1, 1968 amendment. This decision was influenced by the Supreme Court's ruling in a similar case and the detailed analysis conducted by the Delhi High Court. In conclusion, the High Court ruled in favor of the assessee, answering both questions in the negative and holding that penalties should be imposed as per the pre-amendment provisions of section 271(1)(c). No costs were awarded in this judgment.
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