1978 (2) TMI 99

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....n 80 per cent. of the total income on which he was assessed, the Income-tax Officer initiated penalty proceedings under section 271(1)(c) of the Income-tax Act, 1961. As the minimum penalty leviable was more than Rs. 1,000 he referred the case to the Inspecting Assistant Commissioner for taking further action in this matter. The Inspecting Assistant Commissioner issued notice under section 274(2) of the Income-tax Act, 1961, to the assessee to show cause why penalty should not be imposed upon him for failure to disclose the correct particulars of his income in his return. In reply to the said show-cause notice, the assessee offered an explanation contending that the addition in the assessment was made merely on estimate and that he did not ....

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....alf of the revenue that since the return of income was filed by the assessee on the 15 th September, 1964, the penalty proceedings were governed by the Explanation under section 271(1)(c) of the Income-tax Act, 1961, which was introduced on 1st April, 1964. The Tribunal held that the said Explanation which was added with effect from 1st April, 1964, had no application to the assessment for the assessment year 1963-64. In these circumstances, the Tribunal allowed the assessee's appeal and cancelled the penalty. Upon that the following question has been referred to this court, as directed under section 256(2) of the Income-tax Act, 1961. " Whether, on the facts, that the return of income for 1963-64 having been filed only on 15th September....

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....he return was filed, as mentioned hereinbefore again, on the 15th September, 1964, that is to say, after the introduction of the said Explanation to the said Act. Therefore, after the said Explanation has been added, the assessee returned the income and committed the offence mentioned in the Explanation. It seems to us that the position in law is that in the case of an offence of this nature the law applicable would be as on the date when the act which made the offence is committed. This is the view which has been taken by the Division Bench of the Allahabad High Court in the case of Commissioner of Income-tax v. Data Ram Satpal [1975] 99 ITR 507 (All). We are in respectful agreement with this view of the Division Bench of the Allahabad Hig....