Transitional tax penalty rules under the 1961 Act apply where assessment was completed after commencement, despite an earlier return.

Where an assessment for an earlier year was completed on or after 1 April 1962, concealment penalty proceedings were governed by section 297(2)(g) of the Income-tax Act, 1961, even though the return had been filed under the repealed 1922 Act. The transitional savings scheme in section 297(2) was treated as self-contained and controlling, so section 6 of the General Clauses Act did not displace it. On that basis, penalty could be initiated and imposed under section 271 of the 1961 Act, and the assessee's objection to the new Act's application failed.

---

---

Issues: Whether, in a case where the return was filed before 1 April 1962 but the assessment was completed after that date, penalty for concealment could be initiated and imposed under section 271(1)(c) of the Income-tax Act, 1961, by virtue of section 297(2)(g), or whether the matter was confined to section 28(1)(c) of the Income-tax Act, 1922.

Analysis: The assessment year in question fell within the transitional category covered by section 297(2)(g), because the assessment was completed on or after 1 April 1962. The savings provisions in section 297(2) were treated as self-contained and as expressing Parliament's intention regarding the effect of repeal. The Court distinguished the saving for assessments completed before 1 April 1962 from the separate provision governing assessments completed after that date, and held that clause (g) was the applicable provision. The Court further held that section 6 of the General Clauses Act, 1897, did not displace the express transitional scheme enacted in section 297(2), and that the penalty machinery under the new Act applied when penalty proceedings were first initiated after the commencement of the new Act in such a case.

Conclusion: Penalty proceedings were validly initiated under section 271 of the Income-tax Act, 1961, and the assessee's objection failed.

Final Conclusion: The reference was answered against the assessee, affirming that the post-commencement completion of assessment attracted the penalty provisions of the 1961 Act under the statutory saving scheme.

Ratio Decidendi: Where an assessment for an earlier year is completed on or after the commencement of the Income-tax Act, 1961, the imposition of penalty for concealment is governed by section 297(2)(g) and may be initiated and imposed under section 271 of the 1961 Act notwithstanding that the return had been filed under the repealed 1922 Act.

---