TaxTMI 
TaxTMI 
1996 (11) TMI 64
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....ed during the assessment proceedings relating to the assessment years 1972-73 and 1973-74 that a house was being constructed by the assessee in the name of his wife during the previous years relating to the aforesaid four assessment years. He, therefore, initiated proceedings under section 147(a) read with section 148 of the Act, 1961, for the assessment years 1966-67, 1968-69 and 1969-70. Pursuant to the notices issued under section 148, the assessee filed returns for the said three years showing income "nil". The reassessments for these years were made on March 9, 1976, as under : Rs. 1966-67 10,500 1968-69 10,190 1969-70 7,890 The comparative position of the income originally assessed, income reassessed and the concealed income for these years is as follows : ------------------------------------------------------------------------------------------------------------------------------------------------ Assessment Income shown Income shown Concealed year in original in reassessment income assessment ----------------------------------------------------------------------------------------------------------------------------------------------- Rs. Rs. Rs. ....
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.... was no notice under section 148, the Appellate Assistant Commissioner computed minimum penalty at Rs. 20,615, i.e., on the difference of the incomes shown and the income assessed. This is how the Appellate Assistant Commissioner imposed penalties for the years under consideration as follows : Rs. 1966-67 7,000 1968-69 10,190 1969-70 7,890 1973-74 20,615 In further appeal filed by the assessee, the Income-tax Appellate Tribunal held that the Appellate Assistant Commissioner was justified in enhancing the penalties on the basis of the returns filed in response to notices issued under section 148. The short submission of learned counsel for the assessee before us is that the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal both legally erred in holding that penalty was leviable with reference to the incomes as shown in the returns filed in response to the notices under section 148. His submission is that simply because "nil" income was shown in the returns filed in response to the notices under section 148 for the first three years, incomes originally returned for those years will not stand obliterated. It is submitted by him that when the a....
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....led pursuant to a notice under section 148, then the question will be as to which return is correct. Simply because the assessee filed the return in response to notice under section 148, the original returns filed by the assessee for the first three assessment years will not be extinguished and the contents thereof will not be effaced altogether. Can it be said that the assessee concealed particulars of the incomes having been shown in the original returns for the first three years ? Such income having already been disclosed in the original returns, it will not be proper to say that there was concealment to that extent simply because such incomes were not shown subsequently in the return filed in pursuance of the notice issued under section 148. What is disclosed cannot be said to have been concealed. The only thing is that the returns filed in response to the notices issued under section 148 by the assessee were incorrect inasmuch as he showed "nil" income in them as against the incomes originally disclosed. The words " in respect of which the particulars have been concealed or inaccurate particulars have been furnished " in section 271(1)(iii), qualify the preceding expression "t....
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....tention of counsel and held that the penalty would be computed on the basis of the law which obtained on the date when the offence was committed, i.e., when the original return was filed which in that case was filed prior to the amendment. It is to be made clear that in the instant case we are not concerned with the question as to at what rate penalty is to be computed but before us the question for consideration is whether the concealed income will be determined with reference to the returns filed in response to the notices under section 148 or vis-a-vis the original returns. The decision in Onkar Saran's case [1992] 195 ITR 1 (SC) is relevant on this point also inasmuch as the Supreme Court ruled that original returns are not rendered useless or inconsequential after reassessment proceedings having been completed. In support of such proposition, the Supreme Court relied on the cases of multiple returns. The Supreme Court held that the decision of the Madras High Court in Govindarajulu Iyer (C. V) v. CIT [1948] 16 ITR 391, which was approved by the Supreme Court in Malbary (N. A.) and Bros. case [1964] 51 ITR 295 also establishes the proposition that, even in the course of r....