Penalty under the Income-tax Act, 1961 applies to pre-1962 years when assessments were completed after 1 April 1962.

Penalty under section 271(1)(a) of the Income-tax Act, 1961 could be levied for assessment years ending before the Act commenced where the assessments were completed after 1 April 1962. The Tribunal's view that only the Indian Income-tax Act, 1922 could apply was displaced by the later Supreme Court ruling reversing the Mysore High Court and the principle in Jain Brothers. The question was therefore answered in the affirmative, in favour of the Revenue.

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Issues: Whether penalty could validly be levied under section 271(1)(a) of the Income-tax Act, 1961 for assessment years 1950-51 to 1955-56 when the assessments were completed after 1 April 1962.

Analysis: The Tribunal had proceeded on the view that penalty for the relevant assessment years could be imposed only under the Indian Income-tax Act, 1922. The later Supreme Court decision reversing the Mysore High Court, read with the principle accepted in Jain Brothers, established that where assessments were completed after 1 April 1962, penalty could be imposed under section 271 of the Income-tax Act, 1961 even in respect of assessment years ending before the commencement of that Act.

Conclusion: The question was answered in the affirmative and in favour of the Revenue.

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