COMMISSIONER OF INCOME TAX Vs. KANHAIYALAL GHATIWALA

JUDGEMENT

(1.) IN this reference, the Income -tax Appellate Tribunal, Jaipur Bench, Jaipur (hereinafter referred to as 'the Tribunal'), has referred the following question for the consideration of this court:

(2.) WE find that the Allahabad High Court in Addl. CIT v. Mewa Lal Sankatha Prasad : [1979]116ITR356(All) has taken the view that for the purpose of levy of penalty for concealment of income under Section 271(1)(c) of the Income -tax Act, 1961, the law applicable would be that prevailing on the date of the filing of the original return and not the date of the filing of a subsequent return in pursuance of a notice under Section 148 of the Income -tax Act, 1961, and that if the original return was filed prior to April 1, 1968, penalty will have to be calculated under the law as it stood prior to that date, even though the return under Section 148 was filed subsequent to that date. The said view is in consonance with the law laid down by the various High Courts in CIT v. A. Rm. A.L.A. Arunachalam Chettiar AIR 1932 Mad 433, CIT v. Badridas Ramrai Shop , CIT v. Angara Satyam : [1959]37ITR230(AP) , Ayyasami Nadar and Bros. v. CIT : [1956]30ITR565(Mad) , Vadilal Ichhachand v. CIT : [1957]32ITR569(Bom) , Dayabhai Girdharbhai v, CIT : [1957]32ITR677(Bom) and Waman Padmanabh Dande v. CIT (Nag). In Brij Mohan v. CIT : [1979]120ITR1(SC) , the Supreme Court has also laid down that penalty is imposed on account of the commission of a wrongful act and it is the law operating on the date on which the Wrongful act was committed which determines the penalty. In view of the aforesaid decisions, the question referred is answered in the affirmative, i.e., against the Revenue and in favour of the assessee, and it is held that the Tribunal was justified in taking the view which it has taken. The reference is answered accordingly. No order as to costs.