ADDITIONAL COMMISSIONER OF INCOME TAX Vs. MOHANDAS SEWAKRAM

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961 (hereinafter called "the Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :

(2.) THE material facts giving rise to this reference, as set out in the statement of the case, briefly are as follows : THE assessee is an individual. THE assessment year in question is 1964-65. On the basis of the return of income filed by the ussessee, the order of assessment was passed. Subsequently, the ITO reopened the assessment for the year 1964-65, and a notice under Section 148 of the Act was issued to the assessee as the ITO had reason to believe that income of the assessee had escaped assessment. In response to this notice, the assessee filed a return on October 30, 1969. In reassessment proceedings, the ITO made additions to the income originally assessed and initiated penalty proceedings against the assessee for having concealed income in the return filed in response to the notice under Section 148 of the Act. THE matter was referred to the IAC who found that the assessee had concealed his income. THE IAC further held that the penalty liable to be imposed was with reference to the amount of income concealed in the return filed on October 30, 1969. On appeal before the Tribunal, it was contended that the amended provisions of Section 271(1)(d), which came into force from April 1, 1968, would not be attracted as the default on the part of the assessee would be attributable to the return of income filed in the course of original assessment proceedings. This contention was upheld by the Tribunal. Aggrieved by that order, the Revenue submitted an application before the Tribunal for making a reference to this court, That is how, at the instance of the Revenue, the aforesaid question of law has been referred to this court for its opinion.

(3.) NOW, penalty is imposed on account of the commission of a wrongful act, and it is well-settled that it is the law in force on the date on which the wrongful act is committed which determines the penalty. In the instant case, the wrongful act took place on October 30, 1969, when the return in response to the notice under Section 148 of the Act was filed, by the assessee. The Tribunal, therefore, erred in holding that the law applicable for the imposition of penalty in the instant case would be that contained in Section 271(1)(c) prior to its amendment from April 1, 1968.