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TMI Blog1978 (8) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,840 was shown to accrue from a truck referred to as Mohd. Hussain Truck. The examination of the assessee's account books by the ITO revealed that in addition to Mohd. Hussain Truck account, the income from this truck was entered in another account in the name of Karam Singh. It was further found that the assessee had another truck referred to as the Leyland truck and that the assessee had made considerable profits from this truck also during the relevant account year. The ITO added three items totalling Rs. 29,039 as income from truck business in place of Rs. 2,840 returned by the assessee in the revised return. Penalty proceedings were also started against the assessee. The IAC held that the assessee had concealed the particulars of its income and had furnished inaccurate particulars and was liable to penalty under s. 271(1)(c) of the Act. On this finding penalty of Rs. 27,000 was imposed on the assessee by the IAC. In appeal, the Tribunal agreed with the findings of the Commissioner that the mistake committed by the assessee in not disclosing the truck income was not an honest mistake and that the non-disclosure was wilful. The Tribunal also examined the question as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been avoided if the income as returned had been accepted and the maximum leviable was one hundred fifty per cent. of such tax. From 1st April, 1968, the minimum penalty leviable is a sum equal to the amount of the income in respect of which the particulars are concealed or inaccurate particulars are furnished and the maximum is the double of the amount of such income. The learned counsel for the assessee submitted that the liability for payment of penalty for concealment of income was incurred by the assessee when the return was filed and the law in force at that point of time must determine the quantum of penalty and not the law in force at the time when the revised return was filed or the assessment was made and, therefore, the I.T. authorities ought to have determined the penalty in accordance with cl. (iii) as it stood before 1st April, 1968. In our opinion, in the facts and circumstances of this case, the submission made by the learned counsel must be accepted. An assessee incurs penalty under s. 271(1)(c) when he conceals the particulars of his income or furnishes inaccurate particulars of his income. Concealment implies " intentional suppression of truth or fact kn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brothers v. Union of India [1970] 77 ITR 107 (SC) that imposition of penalty can take place only after the assessment has been completed, for it is the satisfaction of the I.T. authorities that a default has been committed by the assessee that attracts the provisions relating to penalty. These observations which relate to the stage when a penalty proceeding should be initiated have no relevance to the question as to the substantive law to be applied to a penalty proceeding. It is some default on the part of the assessee which makes him liable for penalty and it is the law in force at the time of default which determines his liability. In Jain Brothers' case [1970] 77 ITR 107 (SC), their Lordships were concerned with s. 297(2)(g) which specifically provides that in respect of assessment years prior to l962-63, if the assessment is completed on or after 1st April, 1962, penalty may be levied under the provisions of the 1961 Act. It has rightly been said that s. 297(2)(g) constitutes an exception to the general principle that the law to be applied is that in force at the date when the default which attracts penalty is committed : [See Kanga Palkhivala on Income Tax, Vol. I, Seventh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounted to concealment. The assessee thus incurred the penalty on the date when it filed the return and the quantum of the penalty to which it became liable ought to be determined in accordance with cl. (iii) of s. 271(1) as it then stood. The learned counsel for the department, however, submitted that as the assessee filed a revised return on 20th February, 1969, where also the concealment continued except to the extent of Rs. 2,840, the liability for penalty must be determined according to cl. (iii) as it stood on the date of the revised return. We are unable to accept this submission. The provision dealing with revised return is s. 139(5) which says that if any person having furnished a return discovers any omission or wrong statement therein, he may furnish a revised return at any time before the assessment is made. A revised return can be filed only when the assessee " discovers any omission or wrong statement " in the return earlier filed by him. The omission or wrong statement in the return which entitles the assessee to file a revised return must be one which is later discovered, i.e., which is unintentional and which occurs because of some mistake of which the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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