1976 (4) TMI 45

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.... 271(1)(c) of the Income-tax Act, 1961, as barred by limitation by holding that the amendment to section 275 of the Act (substituted by Act 42 of 1970) being operative from April 1, 1971, does not extend the period of limitation in respect of penalty proceedings initiated on October 21, 1970, pending for disposal as on April 1, 1971 ? " Assessee is an individual and the relevant assessment year is 1968-69. Return for the year was filed on November 12, 1968, disclosing income of Rs. 11,570 but assessment was completed on a total income of Rs. 28,894 on 20th of October, 1970. A proceeding for imposition of penalty under section 271(1)(c), of the Act was initiated by the Income-tax Officer, but as minimum penalty of more than Rs. 1,000 was ....

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....while imposing the penalty. The assessee's right is affected which has been guaranteed by the unamended section 275 of the Act and no retrospective effect has been provided by the amendment of April 1, 1971. I, therefore, hold that the penalty imposed by the Inspecting Assistant Commissioner is unsustainable in law. The levy of penalty is cancelled." So far as the question referred to us is concerned, there is a direct decision of this court supporting the stand of the revenue in the case of Commissioner of Income-tax v. Bhikari Charan Panda After noticing the amendment of section 275 brought about by the Taxation Laws (Amendment) Act of 1970, with effect from April 1, 1971, this court observed : " Admittedly, if the new provision app....

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.... in Commissioner of Income-tax v. Ramchand Kundanlal Saraf and a decision of the Allahabad High Court in Commissioner of Income-tax v. Data Ram Satpal. Some of these decisions do take a view which would support Mr. Agarwalla's contention, while the other cases are liable to be distinguished on the basis that they are concerned with the quantum of penalty. The question of limitation has two aspects: (i) regarding the period during which penalty can be imposed and this in our view is wholly procedural, and (ii) regarding the quantum of penalty in view of the fact that the quantum has been enhanced by amendment which is a substantive matter. So far as the substantive aspect of it is concerned, there is no question of retrospective applicati....