1975 (5) TMI 5 - HC - Income Tax

Assessment Proceedings, Burden Of Proof, Law Applicable, Penalty Proceedings, Revised Returns

Issues Involved:
1. Applicability of Section 271(1) provisions prior to the 1968 amendment.
2. Applicability of Section 271(1)(c) and its Explanation for assessment years 1962-63 and 1963-64.
3. Imposition of penalty based on the principle of Anwar Ali's case post-1964 amendment.
4. Jurisdiction of the Inspecting Assistant Commissioner to impose penalties under Section 271(1)(c) for the specified assessment years.

Detailed Analysis:

Issue 1: Applicability of Section 271(1) Provisions Prior to the 1968 Amendment
The Tribunal held that the provisions of Section 271(1) as they stood before the 1968 amendment should apply to the assessment years in question. The court agreed with the Tribunal's alternative reasoning that the concealment occurred in the original returns filed before April 1, 1968. It was determined that the law applicable would be the one in effect prior to April 1, 1968. Thus, the amendments introduced by the Finance Act of 1968 were not applicable to the assessment years in question.

Issue 2: Applicability of Section 271(1)(c) and Its Explanation for Assessment Years 1962-63 and 1963-64
The Tribunal held that the Explanation added to Section 271(1)(c) by the Finance Act of 1964 would not apply to the assessment years 1962-63 and 1963-64, even though the returns were filed after April 1, 1964. The court disagreed with this view, citing the Division Bench decision in Commissioner of Income-tax v. Data Ram Satpal, which established that penalty proceedings are distinct from assessment proceedings. Therefore, the Explanation added by the Finance Act of 1964 would apply to returns filed after April 1, 1964, regardless of the assessment year.

Issue 3: Imposition of Penalty Based on the Principle of Anwar Ali's Case Post-1964 Amendment
The Tribunal concluded that the principle laid down in Anwar Ali's case remained unaffected by the Explanation added to Section 271(1) in 1964. The court agreed, stating that the Explanation merely raises a rebuttable presumption and does not alter the fundamental requirement of proving concealment. The Supreme Court's ruling in Anwar Ali's case emphasized that the falsity of an explanation alone does not justify the imposition of a penalty without cogent evidence of concealment.

Issue 4: Jurisdiction of the Inspecting Assistant Commissioner to Impose Penalties Under Section 271(1)(c) for the Specified Assessment Years
The Tribunal found that the penalties imposed by the Inspecting Assistant Commissioner were beyond his jurisdiction, as the minimum penalties for the years in question were less than Rs. 1,000, thus falling under the jurisdiction of the Income-tax Officer. The court agreed with this finding, affirming that the law applicable was the one before April 1, 1968, and there was no concealment or furnishing of inaccurate particulars regarding the bank deposits.

Conclusion:
1. The Tribunal was correct in holding that the provisions of Section 271(1) as they stood prior to the 1968 amendment should be applied.
2. The Tribunal was incorrect in holding that the Explanation added by the Finance Act of 1964 would not apply to assessment years 1962-63 and 1963-64.
3. The Tribunal was right in holding that the principle of Anwar Ali's case applies even after the 1964 amendment to Section 271.
4. The Tribunal was justified in holding that the Inspecting Assistant Commissioner had no jurisdiction to impose penalties for the specified assessment years.

The assessee was awarded costs assessed at Rs. 300.

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