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Issues:
Determining the measure of penalty leviable under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 1961-62 based on the law applicable at the time of concealment. Analysis: The case involved a reference regarding the measure of penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 1961-62. The assessee, engaged in the manufacture of plastic and wax models, filed a "nil" return of income after an estimate by the Income-tax Officer. The total income was determined at Rs. 17,091, leading to a penalty of the same amount imposed by the Inspecting Assistant Commissioner under the provisions of section 271(1)(c) as amended from April 1, 1968. The Tribunal upheld the penalty but reduced it to Rs. 1,500 based on the law before April 1, 1968, resulting in the reference to the High Court. The High Court referred to the Supreme Court decision in Brij Mohan v. CIT, establishing that the penalty for concealment of income should be calculated based on the law in force at the time of the act of concealment. Therefore, the penalty in this case must be determined according to the provisions of section 271(1)(c) as amended from April 1, 1968, despite the assessment year being 1961-62. The Court emphasized that the date of the act of concealment is crucial in penalty calculations. The Court concluded that the penalty for the assessment year 1961-62 must be in accordance with the law as amended from April 1, 1968. The assessee's plea for a reduced penalty based on sympathy was not considered, as advisory jurisdiction does not allow for such considerations. The Court suggested that the income-tax authorities could take into account sympathetic factors when the matter is reviewed by the Tribunal. Ultimately, no order was made regarding the costs of the reference, considering all the circumstances of the case.
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