Penalty for delayed return filing governed by the 1961 Act where assessment was completed after its commencement.

Penalty for delay in filing a return was governed by the Income-tax Act, 1961 because the assessment was completed after that Act came into force, even though the return related to assessment year 1959-60. The Tribunal erred in applying the earlier Income-tax Act and reducing the penalty on that basis. The reduction could not be sustained, as section 271(1)(a) of the 1961 Act was the applicable penalty provision. The question was answered in the negative and in favour of the Revenue, and the reduction of penalty under the earlier Act was held invalid.

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Issues: Whether the penalty imposed for delay in filing the return could be reduced on the footing that the provisions of the earlier Income-tax Act applied instead of section 271(1)(a) of the Income-tax Act, 1961.

Analysis: The return related to assessment year 1959-60, but the assessment had been completed after the Income-tax Act, 1961 came into force. The Tribunal proceeded on the wrong basis that the provisions of the earlier Act governed the penalty. The applicable law for penalty was therefore the 1961 Act, and the Tribunal's reduction of penalty on the basis of the 1922 Act could not be sustained.

Conclusion: The question was answered in the negative and in favour of the Revenue; the reduction of penalty on the basis of the earlier Act was held invalid.

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