Penalty for HUF failing to disclose land sale profits governed by law in force on return date under s.271(1)(c)

Assessee (HUF) failed to disclose profits from land sales; SC held penalty under amended s.271(1)(c) is determined by the law in force on the date of the offending return and the High Court correctly applied that principle. The Court rejected the argument that an earlier pre-amendment return should limit penalty exposure, noting differing measures of penalty applicable from 1 Apr 1968 and later from 1 Apr 1976, and affirmed that the High Court's view was correct. Appeals dismissed.

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Issues Involved:
1. Applicability of the amended Section 271(1)(c) of the Income-tax Act, 1961, for penalty imposition.
2. Determination of the relevant date for applying the penalty provisions.
3. Interpretation of multiple returns in penalty proceedings.
4. Analysis of judicial precedents supporting different views.

Issue-wise Detailed Analysis:

1. Applicability of the amended Section 271(1)(c) of the Income-tax Act, 1961, for penalty imposition:
Section 271(1)(c) of the Income-tax Act, 1961, provides for the levy of penalty in the case of persons who conceal or furnish inaccurate particulars of income. The amendment by the Finance Act, 1968, changed the measure of the penalty from being dependent on the tax avoided to being dependent on the amount of income concealed. The issue in these appeals is whether this amendment applies to the penalty proceedings initiated for the assessment years 1961-62 and 1962-63.

2. Determination of the relevant date for applying the penalty provisions:
The Tribunal and the High Court concluded that the law applicable to penalty proceedings should be the law as it stood on the dates when the original returns were filed. The High Court held that the penalty should be scaled down based on the tax sought to be avoided as per the law prevailing at the time of filing the original returns. The Supreme Court upheld this view, emphasizing that the law applicable to penalty proceedings is the law in force on the date of the original return, not the date of the return filed in response to the notice under Section 148.

3. Interpretation of multiple returns in penalty proceedings:
The court analyzed the situation where multiple returns are filed. It held that even if a return filed under Section 148 involves concealment, the law applicable for penalty should be the law in force at the time of the original return. The court emphasized that the original return forms the basis for determining the date of concealment, and thus the penalty provisions applicable at that time should be used.

4. Analysis of judicial precedents supporting different views:
The court reviewed various High Court decisions supporting the view that the penalty should be based on the original return. These include CIT v. Gopal Krishna Singhania, CIT v. Ram Achal Ram Sewak, and others. The contrary view, which supports the application of the law as on the date of the return filed under Section 148, was also considered but ultimately not accepted. The court found the majority view more acceptable and practical.

Conclusion:
The Supreme Court concluded that the law applicable to penalty proceedings should be the law in force at the time of the original return. The appeals were dismissed, and no order regarding costs was made. The court emphasized that the interpretation should not be influenced by the change in penalty measures post-April 1, 1968, and that the legal principles should remain consistent regardless of the amendments.

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