ADDITIONAL COMMISSIONER OF INCOME TAX Vs. HIRALAL MUNNALAL

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore, has referred the following questions for our opinion :

(2.) THE assessee, M/s. Hiralal Munnalal of Ujjain, an HUF, deriving income from money-lending and silver business and also from house property, filed a return of income for the assessment year 1965-66 on September 30, 1968. THE assessee disclosed its income in the return at Rs. 4,096. THE ITO found that the accounts of the assessee were defective. He, therefore, rejected the book version of the assessee and assessed the assessee at a total income of Rs. 17,460. On appeal by the assessee, the AAC reduced the income assessed by a sum of Rs. 5,250, Thus, as a result of the AAC's order, the income of the assessee was finally assessed at Rs. 12,210.

(3.) THE proceedings under Section 271(1)(c) of the Act are penal in character. It is the basic concept of law that an act of commission or omission becomes an offence only if on the date when, it was committed the law in force declares it to be an offence and the penalty imposable under the provisions of law ordinarily can be imposed only in accordance with the law as it stands on the date when the act giving rise to the penalty is committed. THE question involved in the present case is as to what is the date on which the act of concealment of income attracting the penal provisions of law was committed by the assessee. An assessee is required to file the return of his income within a particular period. If he fails to file his return within the prescribed time but files his return subsequently it cannot be said that by not filing the return within the prescribed time he has concealed his income on the last date on which the return was to be filed by him. When the assessee has filed his return at a later date and in this return he has concealed his income that will be the date on which the act of concealment was committed by the assessee. Non-filing of a return on or before the due date also attracts penalty but from the mere non-filing of the return it cannot be said that income has been concealed on the last date when the return was to be filed. In the instant case, the assessee filed its return for the assessment year 1965-66 on September 30, 1968. THE amended Section 271(1)(c) of the Act came into force on April 1, 1968. In the circumstances, the act of concealment of the income for the assessment year 1965-66 was committed by the assessee on September 30, 1968, when the return was filed. It cannot be presumed that if the assessee had filed its return within the prescribed time it would have concealed its income and, therefore, the act of concealment was completed on the last date on which the return for the assessment year 1965-66 was to be filed by the assessee.