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Issues Involved:
1. Determination of the relevant date for the quantum of penalties u/s 271(1)(c)(iii) of the Income-tax Act, 1961. Summary: Issue 1: Determination of the relevant date for the quantum of penalties u/s 271(1)(c)(iii) of the Income-tax Act, 1961. The Income-tax Appellate Tribunal posed the question of whether the quantum of penalties should be as per the amended provisions of section 271(1)(iii) effective from April 1, 1968. The assessee filed original returns for the assessment years 1965-66, 1966-67, and 1967-68, which were completed before April 1, 1968. Later, revised returns were filed disclosing additional income from the cinema business. The Income-tax Officer initiated penalty proceedings, which were referred to the Inspecting Assistant Commissioner due to the minimum penalty exceeding Rs. 1,000 per year. The Inspecting Assistant Commissioner levied penalties based on the amended provisions effective from April 1, 1968, as the revised returns were filed after this date. The Appellate Tribunal held that the offence of concealment occurred at the time of filing the original returns, thus the law prior to April 1, 1968, should apply. The revenue contended that the relevant date for penalty should be the date of completion of reassessment, i.e., October 22, 1970, when the concealment was detected. The court, after considering various precedents, concluded that the relevant date for fixing the quantum of penalty is the date of filing the returns in which the concealment occurred, not the date of completion of assessment. The court emphasized that penalty for infraction occurs when the offence is committed, not when it is detected. Therefore, the law as it stood at the time of filing the original returns should apply. The reference was answered against the revenue and in favor of the assessee, with costs.
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