Penalty for concealment follows the law on the date of the original return, not the date penalty proceedings begin.

Penalty for concealment under section 271(1)(c) is governed by the law in force on the date of the wrongful act, namely the filing of the original return, and not by the law applicable when penalty proceedings are initiated. Relying on Brij Mohan v. CIT, the text states that the relevant date is when concealment, if any, occurred, so the penalty must be assessed with reference to the legal position then prevailing. The contrary approach, which tied liability to the initiation of penalty proceedings, was rejected, leaving the assessee's position accepted on this point.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 is to be imposed with reference to the law in force on the date of filing of the original return, i.e. the date when the act of concealment occurred, or with reference to the date of initiation of penalty proceedings.

Analysis: The matter was treated as concluded by the Supreme Court decision in Brij Mohan v. CIT, which held that penalty for concealment is governed by the law prevailing on the date of the wrongful act and not by the law in force when penalty proceedings are initiated. The relevant date is the date on which the original return was filed and the concealment, if any, took place.

Conclusion: Penalty is imposable with reference to the date of filing of the original return and the law then in force. The contrary view based on the date of initiation of penalty proceedings was rejected, and the issue was answered in favour of the assessee.

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