Penalty for return filed under section 148 follows the law in force when that default occurs, not the original return date.

Penalty under section 271(1)(c) for a return filed in response to notice under section 148 was governed by the law in force when that default occurred, not by the law applicable to the original return. The Court applied the principle that the wrongful act is attributable to the return filed under section 148, so the amended provisions in force from 1 April 1968 applied. On that basis, the Tribunal was not justified in cancelling the penalty on the ground that the amended section did not apply, and the reference was answered against the assessee.

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Issues: Whether the penalty under section 271(1)(c) was governed by the law in force on the date of the original return or by the amended provisions applicable from 1 April 1968, where the penalty proceedings arose from a return filed in response to notice under section 148.

Analysis: The reference was decided in the light of the principle that, where penalty proceedings are initiated in connection with a return filed pursuant to notice under section 148, the default is attributable to that return and not to the return filed in the original assessment proceedings. The applicable law for penalty is the law in force on the date when the wrongful act is committed, not the earlier law governing the original assessment year. On that basis, the amended provisions of section 271(1)(c) were held applicable.

Conclusion: The Tribunal was not justified in cancelling the penalty on the footing that the amended provisions of section 271(1)(c) did not apply; the answer was returned in the negative, against the assessee.

Ratio Decidendi: For penalty proceedings linked to a return filed in response to notice under section 148, the relevant default is attributable to that return and the penalty is governed by the law in force when the wrongful act is committed.

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