LAWS(CAL)-1988-12-27

KHUB CHAND KUNDANMAL Vs. UNION OF INDIA

Decided On December 13, 1988
KHUB CHAND KUNDANMAL Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) In this application under Article 226 of the Constitution of India, the short question which calls for determination is what would be the rate of penalty applicable to the case of the petitioner.

(2.) Shortly stated, the facts are that, for the assessment year 1964-65, the petitioner, a firm, filed its return on August 10, 1964. The Income-tax Officer, while making the assessment on the return filed on August 10, 1964, requested the petitioner to file a duplicate return and, accordingly, a duplicate return for the said assessment year was filed on February 12, 1969. On the said return, it was marked "duplicate". A disclosure petition under Section 271(4A) of the Income-tax Act, 1961 (hereinafter referred to as "the said Act"), was filed by each of the partners of the petitioner on June 2, 1965. The assessment for the said assessment year was completed on February 14, 1969, and the total income was computed at Rs. 80,731 which included the sum of Rs. 40,000 being the income added by the Income-tax Officer under the head "Income from undisclosed sources" on the basis of peak credits as per disclosure made by the partners under Section 271(4A) of the said Act. The said assessment was confirmed by the appellate authority.

(3.) In the meantime, the Inspecting Assistant Commissioner, by an order dated February 11, 1971, imposed a penalty of Rs. 50,000 under Section 271(1)(c) of the said Act by applying the rate of penalty under the amended provisions of Section 271(1)(c)(iii) of the said Act which came into effect from April 1, 1968. According to the Inspecting Assistant Commissioner, the return was filed on February 12; 1969, and, therefore, the said amended provisions were applicable and the minimum penalty leviable would be Rs. 49,970 and the maximum would be twice the amount.