COMMISSIONER OF INCOME TAX Vs. JYOTI SWARUP AGARWAL

JUDGEMENT

(1.) FOR the assessment year 1966-67, the assesses filed a return on 10th of March, I 969, declaring a total income of Rs. 10,250. Since the assessee did not appear, the Income-tax Officer completed the assessment ex parte by estimating the income of Rs. 25,250. He initiated penalty proceedings and referred the matter to the Inspecting Assistant Commissioner. The Inspecting Assistant Commissioner gave notice to the assesses but the latter failed to appear. The inspecting Assistant Commissioner after going through the return and the history of the case held that the assessee had concealed the particulars of his income or furnished inaccurate particulars thereof in terms of the Explanation to Section 271(1)(c). The difference between the income returned and the income assessed works out at Rs. 15,000. He, therefore, imposed a penalty of Rs. 15,000.

(2.) THE assessee went up to the Tribunal in appeal. THE Tribunal noticed the facts including the fact that on the quantum side the matter had been taken up in appeal to the Tribunal wherein assessable income was reduced to Rs. 20,000. THE Tribunal, however, allowed the appeal on a point of law. THE Tribunal felt that the inspecting Assistant Commissioner had invoked the provision of the Explanation to Section 271(1)(c) as it stood amended, after April 1, 1968. He held that the amendment could not apply to assessment years prior to the coming into force of the amendment, although the return of income had been filed after the amendment had commenced operation. For this view he relied upon a decision of Hajee K. Assainar v. Commissioner of Income-tax [1971] 81 ITR. 423 (Ker). It was ultimately held that the inspecting Assistant Commissioner was not justified in levying a penalty equal to the difference between the income assessed and returned by invoking the Explanation to Section 271(1)(c) after its amendment on April 1, 1968, it was further observed that the Inspecting Assistant Commissioner had no jurisdiction since the minimum penalty imposable was less than Rs. 1,000. THE imposition of penalty was, therefore, cance11ed.

(3.) THE question of law, therefore, is whether the unamended or the amended Clause (iii) of Section 271(1) was applicable to the present case ?