Satish Chandra, C.J. - (1.) THIS is a consolidated reference for three assessment years, namely, 1961-62, 1962-63 and 1963-64. The question of law referred for our opinion is whether the Explanation added to Section 271(1)(c) of the I.T. Act, 1961, with effect from 1st April, 1964, was applicable to penalty proceedings for the aforesaid three assessment years, even though the return for each of these years was filed after 1st April, 1964.
(2.) THE assessee is a registered firm. It runs a steel rolling mill at Kanpur. For the assessment year 1961-62, the assessee filed its return on the 24th August, 1961. It filed a revised return on the 13th September, 1961. THE assessment was completed by the order dated 14th September, 1961. Assessments for the assessment years 1962-63 and 1963-64 were completed on the 19th February, 1963, and the 24th December, 1963, respectively, under Section 143(3) of the Act. It is thus evident that the returns were filed prior to the date of the assessment orders. In other words, the returns of income for all these three assessment years were filed long before the 1st April, 1964, when Section 271(1)(c) was amended and an Explanation added to Clause (c) of Section 271(1). During the course of assessment proceedings for the assessment year 1964-65, the ITO discovered certain Hundi loans in the names of various parties. He, therefore, reopened the assessments for the years 1961-62, 1962-63 and 1963-64. In due course the ITO drew up penalty proceedings for the three assessment years in question. In response to notices under Section 148 the assessee filed returns on the 17th April, 1967, for all these three years.
(3.) SINCE the minimum imposable penalty exceeded in each of the years Rs. 1,000, the ITO referred the cases to the IAC. The IAC repelled the pleas of the assessee and held that it was a clear case of concealment of income. He imposed penalties of Rs. 10,000, Rs. 3,300 and Rs. 25,000, respectively, for each of the aforesaid years. The assessee took the matter in appeal to the Tribunal. In appeal the Tribunal held that Section 271(1)(c) as it stood before its amendment by the Finance Act, 1964, was applicable. The Explanation added by this Finance Act was hence not available to the department.;