Concealment penalty under reassessment must follow the original return's governing law, not later section 271(1)(c) rules.

In concealment penalty proceedings arising from a return filed in response to section 148, the applicable penal law is the law in force when the original return for the relevant assessment year was filed, not the law prevailing when the reassessment return was submitted. On that basis, the old Indian Income-tax Act, 1922 governed the matter, so the Department had to prove concealment under section 28(1)(c) without reliance on the Explanation later introduced in section 271(1)(c) of the 1961 Act. The later Explanation could not be applied separately from the substantive penalty provision, and section 297(2)(g) did not alter the binding Supreme Court position. The penalty was therefore not sustainable.

---

---

Issues: Whether the penalty under section 271(1)(c) of the Income-tax Act, 1961 was rightly deleted, and whether the case was governed by the old Act or the new Act for deciding concealment penalty on a return filed in response to section 148.

Analysis: The assessment year in question related to a period governed by the Indian Income-tax Act, 1922, though the reassessment notice and penalty proceedings were initiated later under the 1961 Act. The controlling principle, as settled by the Supreme Court, is that where a return filed in response to section 148 involves concealment, the penal law applicable is the law in force when the original return for the relevant assessment year was filed, not the law prevailing on the date of the reassessment return. On that basis, the governing provision was section 28(1)(c) of the old Act, under which the Department had to establish concealment without the aid of the later Explanation in section 271(1)(c). The Explanation to section 271(1)(c) of the 1961 Act could not be applied piecemeal, and section 297(2)(g) did not permit departure from the binding Supreme Court declaration of law.

Conclusion: The Tribunal was justified in deleting the penalty, and the penalty could not be sustained under section 271(1)(c) of the Income-tax Act, 1961.

Ratio Decidendi: In penalty proceedings arising from a reassessment return, the applicable concealment penalty law is the law in force when the original return for the relevant assessment year was filed, and the later Explanation to section 271(1)(c) cannot be applied independently of the substantive penal provision.

---