9911796707
TMI Blog1983 (5) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... acts in order to appreciate the arguments addressed by the learned counsel for the applicant. The facts are as follows : For the assessment years 1957-58 and 1958-59, the assessee, Bawa Singh Chawhan (who is now no more and is represented by his legal representatives), filed his returns of income long prior to March 31, 1968. His assessments were completed for the assessment year 1957-58 on December 22, 1961, on an income of Rs. 21,600 and for the assessment year 1958-59 on December 22, 1962, on a total income of 7 Rs. 11,600. Subsequently, the ITO started proceedings under s. 147(a) of the I.T. Act, 1961, as he had reason to believe that by reason of the omission or failure on the part of the assessee to disclose fully and truly all mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y with the completion of the reassessment proceedings, the ITO also initiated penalty proceedings under s. 274 read with s. 271 of the I.T. Act. Subsequently, on June 27, 1969, the penalty proceedings were referred by the ITO to the IAC under s. 274(2) of the Act. The IAC, after issuing notice to the assessee and hearing his explanations, came to the conclusion that as the assessee has concealed the income Rs. 3,263 for each of the years under consideration, a penalty of Rs. 3,263, equal to the amount of income concealed, should be levied upon the assessee for each of the assessment years. He directed accordingly. The assessee preferred appeals to the Income-tax Appellate Tribunal for these and two other assessment years. The Tribunal dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e., after April I, 1968. He also invited our attention to the fact that the assessments had been completed on December 31, 1968, and that the references to the IAC were made on June 27, 1969. His argument was that on all these material dates, the provisions of s. 271(1)(c) of the I.T. Act read with subclause (iii) following thereupon clearly stipulated that the amount of penalty imposable for any concealment was to be between 100% and 200% of the income sought to be concealed. In other words, the minimum penalty imposable was Rs. 3,263 for each of the years as that was the amount of income concealed. Section 274(2), as it stood at the relevant time, reads as follows : " 274. (2) Notwithstanding anything contained in clause (iii) of subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inder Singh [1985] 151 ITR 93 (Delhi). After discussing the various aspects of the matter, the Bench has pointed out that in cases of this type, the offence must be taken to have been committed on the date of filing of the original return. In the present case, the original return was filed by the assessee long before March 31, 1968. At the time the return was filed, the law did not impose any minimum penalty. However, though the returns were filed prior to April 1, 1962, and though the assessment years concerned are 1957-58 and 1958-59, the assessments having been completed after April 1, 1962, the provisions of s. 279(2)(g) are attracted and the penalty has to be imposed under the corresponding provisions of the 1961 Act. The Madras High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi) has also dissented from the decision in the Madhya Pradesh case referred to by Mr. Wadhera. Another argument put forward by Mr. Wadhera was that we are concerned in this case only with the question as to whether the penalty should be imposed by the IAC or by the ITO and that this was purely procedural issue. Referring to certain observations made in CIT v. Jagan Nath Maheshwary [1957] nj), Esthuri Aswathaiah v. ITO [1963] 49 ITR 977 (Mys), CIT v. Royal Motor Car Co. [1977] 107 ITR 753 (Guj) and CIT v. Balabhai Co. [1980] 122 ITR 301 (Guj) regarding the canon of interpretation of machinery or procedural sections, Mr. Wadhera contended that the reference made by the ITO on June 27, 1969, on the basis of the provisions of the I.T. Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal position regarding the quantum of penalty leviable has to be determined with reference to the provisions as they are applicable on the date on which the reference to the IAC is made. But where we are unable to agree with Mr.Wadhera in regard to his contention that in determining what provisions are applicable to a particular case, the ITO's decision should be upheld irrespective of whether it is the correct one or not. If the correct position in law and that is what has been decided in the cases of Joginder Singh [1985] 151 ITR 93 (Delhi), Sucha Singh Anand [1984] 149 ITR 143 (Delhi) and other decisions-regarding the determination of the quantum of the penalty is that it has to be decided in the light of the statutory provision which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
