TaxTMI 
TaxTMI 
1981 (11) TMI 35
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....f the Income-tax Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in casting the burden of proof of concealment on the Department ? 4. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in finding that the Department has not proved that the assessee had intentionally concealed income or deliberately furnished inaccurate particulars of income for the assessment year 1961-62, and is not such finding perverse, unreasonable and unsupported by any materials?" The assessee is a firm. It is running a, chitty business. It is also carrying on banking business. The assessee is maintaining regular books of account in respect of the banking business, but not in respect of the chitty business. There is no dispute about the income computed from the banking business. This case concerns the income computed from the chitty business for the assessment year 1961-62 (accounting year being the year ended on December 30, 1960). For the assessment year 1961-62 the assessee filed a return on July 17, 1961, showing the income from the chitty business as Rs. 49,233 ....
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....ing penalty as it stood at that time governs the penalty proceedings. Since the present Act of 1961 came into force only on April 1, 1962, the Tribunal held that s. 28(1)(c) of the Indian I.T. Act, 1922, is to be applied with all its rigour. The Tribunal then considered each of the three items of income shown in the revised return, Parithoshikam, 1% commission on two chitties and commission in parallel chitties, and took the view that not showing these 3 items in the first return cannot be characterised as intentional concealment or deliberately furnishing inaccurate particulars of such income. The Tribunal, therefore, allowing the appeal cancelled the levy of penalty. The requirement of s. 28(1)(c) of the earlier Act of 1922 is : " If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, in the course of any proceedings under this Act, is satisfied that any person-... (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income ........." Compare the above provision with the requirement mentioned in s. 271 (1)(c) as obtained prior to April 1, 1964 " If the Income-tax Officer or the App....
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....e on which the wrongful act is committed which determines the penalty. Where penalty is imposed for concealment of particulars of income, it is the law ruling on the date when the act of concealment takes place which is relevant. It is wholly immaterial that the income concealed was to be assessed in relation to an assessment year in the past. " It is also axiomatic that for what has not been an offence when done, one cannot be punishable because subsequently such an act has been constituted an offence. In other words, the question as to whether a particular act is wrongful and is an offence is to be determined with reference to the law that was in force on the date when the act was done just as the question of penalty for a wrongful act is to be determined with reference to the law operating on the date on which the wrongful act is committed. It is this principle that is enshrined in the first part of art. 20(1) of the Constitution as per which no person shall be convicted of any offence except for the violation of a law in force at the time of the commission of the act charged as an offence. Therefore, two questions arise : (i) When did the assessee commit the act charged a....
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.... the position so far as one per cent. commission in respect of the two chitties is concerned. As regards the commission in parallel chitties the Tribunal accepted the assessee's case that it is only a method adopted to attract funds to the banking department at comparatively lower cost and that these amounts were lent at higher rate of interest through the banking department. The Tribunal found that such income is reflected in the banking department. Consequently the Tribunal found that the assessee had no intention of concealing such income. On the facts found by the Tribunal and in the circumstances adverted to by it, there can be no doubt that the conclusion arrived at by the Tribunal was correct. If so, there was no violation of s. 28(1)(c) of the earlier Act. Under this provision " penalty on the ground of concealment can be imposed only if there is conscious and deliberate concealment on the part of the assessee ", and " the mere fact that the assessee agreed to the inclusion of cash credits or other amounts in the total income on account of his inability to prove the source or to avoid protracted litigation with the department does not by itself justify the levy of penalt....
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....hall be only that which is provided by the law in force at that time. This is clear from the following passage in the above-mentioned decision (at p. 117): "Both sections 27 l(1) and 297(2)(g) have to be read together and in harmony and so read the only conclusion possible is that for the imposition of a penalty in respect of any assessment for the year ending on March 3 1, 1962, or any earlier year which is completed after the first day of April, 1962, the proceedings have to be initiated and the penalty imposed in accordance with the provisions of section 271 of the Act of 1961. Thus, the assessee would be liable to a penalty as provided by section 271(1) for the default mentioned in section 28(1) of the Act of 1922, if his case falls within the terms of section 297(2)(g)." Mark, the default is the default mentioned in s. 28(1) of the earlier Act or, in other words, the ITO's satisfaction should be that the assessee is guilty of one or the other of the defaults mentioned in s. 28(1) of the earlier Act. On being so satisfied the assessee shall be liable to be proceeded against under s. 271 (1) of the present Act and he would be liable to a penalty as provided therein. Howeve....