9911796707
TMI Blog1976 (4) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... s under s. 17 for asst. yrs. 1963-64 to 1964-65 were served upon the assessee requiring the assessee to file a return of income for each of the years within the time specified in each notices and yet the assessee delayed further the filing of the return in each case. However, the penalties in dispute are imposed for the default committed by the assessee in not filing the return under s. 14(1) on the 30th day of June of each of the five asst. yr. 1960-61 to 1964-65. 3. Particulars of the dates on which the returns were filed and the amounts of penalties which were imposed by the WTO and also sustained in the corresponding first appeal are as below: Assessment year Date of filing return Amount of Penalty 1960-61 27-10-1967 1,170 1961-62 14-3-1968 3,980 1962-63 14-3-1968 3,720 1963-64 3-11-1969 35,770 1964-65 3-11-1969 35,740 . Total 80,380 4. The relief claimed by the assessee in each of these appeals is that the orders of the AAC and the WTO may be set aside. The grounds of appeal which accompany are identical for all the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point goes to the root of the matter. It is also clear that the point is a point of law because, as we shall discuss hereafter, the decision on the point turns on the question whether the law before an amendment and after the amendment is applicable or not applicable. As regards the decision reported at 74 ITR 254 it related to a controversy in which the jurisdiction of the Tribunal to admit a fresh ground not arising from the order of the AAC was in controversy and it was not the discretion of the Tribunal to admit a fresh ground going to the root of the matter which was in controversy. It was held that the Tribunal does not have the jurisdiction to admit a ground which is entirely outside the scope of the appeal decided by the AAC. In other words, the relief which the assessee sought from the Tribunal was on a point which was not subject matter of an appeal to the AAC and it could not be said that the assessee was aggrieved by the decision on the AAC on that point when the assessee filed the second appeal to the Tribunal. In a case like this situation is otherwise. When the point of law goes to the root of the matter, the relief claimed is the same as the relief which was cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed for assessment years which commenced and ended prior to this date. It may be clarified that a provision corresponding to s. 18(4) as it stood upto 31st march, 1965 is not to be found in s. 18 which was in force w.e.f. 1st April, 1965 or any another section of the WT Act. The stand of the Department is that the provisions as they stand after 1st April, 1965 are applicable, that therefore it is not necessary that the WTO should obtain the prior approval of the IAC before imposing the penalty and that therefore the orders imposing penalty are legal. The alternation contention urged by Shri Appachoo relying upon the decision in the case of Dutta Brothers (40 ITR 298) was that if it should be held at there was an illegality of the kind suggested above, the illegality is curable and that the matter may be restored to the file of the WTO at the stage at which the alleged illegality has supervened. Shri Jain did not put forward any arguments at all with regard to the above mentioned alternative contention of Shri Appachoo. 10. We may consider in the first instance whether the provisions of the law as they stood before 1st April, 1965 or as they stand after 1st April, 1965 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kinds of offences for which penalty was imposable. The points of distinction included more than one aspect; a minimum and maximum penalty was prescribed, whereas earlier, only a maximum penalty had been prescribed; in a case of concealment of income the IAC was authorised to impose penalty if the minimum penalty exceeded a certain sum : when the ITO had jurisdiction to impose penalty it was no longer necessary for him to obtain the prior approval of the IAC; a period of limitation for imposing penalties was newly introduced. 15. Sec. 17 of the GT Act was amendment by Act 53 of 1962 w.e.f. 1st April, 1962. It was brought in line with s. 271(1)(c) of the 1961 IT Act; however a point of distinction which continued was that there in no period of limitation for imposing a penalty. 16. Sec. 271 of the 1961 Act was amended w.e.f. 1st April, 1964. The amendment affected mainly the provisions relating to the offence of concealment of income. The word "deliberately" was omitted from the language and simultaneously on explanation was added indicating that the initial burden of proof may rest on the assessee in certain circumstances. 17. Sec. 18 of the WT Act was amended next. This chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive only in a case of concealment of income, whereas the penalties which are the subject matter of the appeals under consideration are for a different kind of offence, that is, the delay in filing the return of income, the distinction is not of any importance. As regards the angle of the period of limitation, it is also of no importance, because if it is held that the provisions of the WT Act as they stood prior to 1st April, 1965 are applicable in the present case, the position is that these provisions which did not contain any period of limitation are similar to the provisions of the GT Act at the material time. 18. The history of the legislation as set out above has to be borne in mind partly to appreciate the effect of the manner in which the amendment of s. 18 of the WT Act was brought about and partly because some of the authorities which we have to take into consideration arose in relation to assessments made or penalties imposed under the IT Acts or the GT Act. 19. The first appeal is the effect of the manner in which the s. 18 of the WT Act stands "amended" w.e.f. 1st April, 1965. It will be noticed that the section as it stood earlier has been "substitued" by the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Thus, if an offence is committed at a stage at which the repealed Act is applicable, the punishment which may be the penalty will be imposable even after the repeal. Further, the indication is that though the corresponding provision of the repealing Act may co-exist with the provision which has been repealed, the proceedings relating to an offence under the repealed Act will continue under the provisions of the repealed Act and not under the provisions of the repealing Act. In the instant case it would be consistent with the above mentioned principle to hold that the provisions of s. 18 as they stood prior to the amendment will be applicable if it should be found that the offence was committed prior to 1st April, 1965. 21. Before going on to consider the guidance available from decisions relating to penalties, we may get out to the way those decisions which may not be applicable in the present case. It was Shri Jain, who relied upon the decision of the Supreme Court in the case of Karimtharuvi Tea Estate Ltd. (60 ITR 262) in which it was held that the law as it statnds on the first day of the relevant assessment year shall be applicable for that year. It is true that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions are of other High Courts and they are reported at 95 ITR 562, 95 ITR 599 and 81 ITR 423. In each case the assessment year was a period prior to 1st April, 1964. The stand of Department was that the provisions of s. 271(1)(c) of the 1961 Act as they stood after the amendment of 1st April, 1964 introducing the Explanation etc., are applicable. This preposition was not accepted whenever the return was filed before 1st April, 1964 and it was accepted whenever the return was filed after 1st April, 1964. Thus the principle adopted was the same as the principle laid down in the decision reported at 98 ITR 474. Once again, these three decisions are of help in deciding the point at issue before us only indirectly. They support the preposition that the law on which the law prevailing on the date on which the offence is committed is applicable but they do not help the case of the Department at the same time that the law prevailing on the date on which the return was filed is applicable because this is not a universal rule. The law prevailing on the day on which the return was filed is applicable only if the offence is committed while filing the return, as we shall discuss hereafter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs are taken and completed latter. This principle is derived from the decision reported at 98 ITR 540. Though that decision related to the GT Act, since there is no material distinction between the provisions on the point in sections before and after the amendment in the GT Act and the WT Act, we are justified in respectfully following the principle of the said decision. To clarify, the point of distinction as between the GT Act and WT Act is that there is no period of limitation in the order for imposing the penalty even after the amendment. This does not make any material difference to the application of the rest of the provisions including the provision for the officer obtaining the previous approval of the IAC which is the material part of the provision for the purpose of the controversy under consideration. Similarly, the absence of the explanation in the GT Act in comparison with the WT Act as they stand after the respective corresponding amendments does not make any difference to the point in controversy. 27. As regards the aspect that the provisions of s. 18(4) of the WT Act appear prima facie to be procedural and may therefore be conceivably held to be applicable retr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is settled by the decision of the Supreme Court reported at 40 ITR 298. Shri Jain did not have anything to say in answer to the point raised by Shri Appachoo. The above mentioned decision related to s. 28(1)(a) of the 1922 Act which is similar to s. 18(1)(a) of the WT Act as it stood prior to 1st April, 1965. In the case reported at 40 ITR 298 the illegality was that the assessee had not been given the opportunity to be heard. Such an opportunity has to be given under the provisions of s. 18(2) of the WT Act as it stood prior to 1st April, 1965. As discussed earlier, s. 18(4) requires that the WTO shall not impose the penalty without the previous approval of the IAC. Sec. 18(2) as well as s. 18(4) relate to procedure. An illegality in such a matter is curable on the principle of the decision reported at 40 ITR 298. Respectedly following the ratio of that decision, we hold that the matter has to be restored to the file of the WTO for each of these years under consideration with a direction that he may continue the proceedings for imposing penalty and impose a penalty, if so advised, only after obtaining the previous approval of the IAC, and if and when such approval is received. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
