Retrospective penalty amendment under income tax law sustains penalty where assessed tax governs liability despite lower final tax.

A retrospective amendment substituting "assessed tax" for "tax payable" in the penalty provision had to be applied as if always in force. On that basis, the assessee could not escape penalty merely because the tax ultimately payable was lower than the amount originally assessed and paid. The Tribunal was therefore incorrect in deleting the penalty, and the referred question was answered against the assessee and in favour of the Revenue.

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Issues: Whether the Tribunal was right in deleting the penalty imposed under section 271(1)(a) of the Income-tax Act, 1961 in view of the retrospective amendment substituting the expression "assessed tax" for "tax payable".

Analysis: The penalty provision stood amended retrospectively, and the substituted expression was deemed always to have been in force. The answer to the referred question had therefore to be determined on the basis of the amended provision, not the earlier wording. On that basis, the assessee could not avoid penalty merely because the tax ultimately payable was less than the amount originally assessed and paid.

Conclusion: The Tribunal was not right in deleting the penalty; the referred question was answered in the negative, against the assessee and in favour of the Revenue.

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