C.S.P.SINGH, J. - (1.) THE two assessment years involved in this reference are 1967-68 and 1970-71. The assessee's returns should have been filed on or before 30th June, 1967, and 30th June, 1970, respectively, for the two years in question. No return was, however, filed by the assessee and, accordingly, the WTO issued notice under S. 14(2) of the WT Act, 1957 (hereinafter referred to as "the Act"). The notice under S. 14(2) for the asst. yr. 1967-68 was served on the assessee on 25th of December, 1967, and that for the other year on the 12th of June, 1970. The assessee, however, filed first a return for the asst. yr. 1967-68, on the 12th of June, 1971, and for 1970-71, on 4th June, 1971.
(2.) THE WTO being of the view that the assessee had failed to file the returns in time without any reasonable excuse issued notice under S. 18(1)(a). The assessee's explanation was that one K. P. Chaterji, advocate, had been looking after his affairs from the period of his minority and had also been maintaining accounts and valuation of the property. The assessee was not aware of all the facts necessary for evaluation of the property as he relied upon Sri K. P. Chaterji exclusively in these matters. An affidavit of Sri K. P. Chaterji was also filed stating, inter alia, that an appeal regarding valuation for the asst. yr. 1961-62 had been filed before the Tribunal and there was a dispute as regards the quantum of valuation between the assessee and the Department. The Tribunal disposed of the appeal on 24th Jan., 1970, and during the period, the assessee did not file the return as he was not sure of the valuation. In para. 8 of the affidavit, Sri K. P. Chaterji stated that as he was practising solely on the civil side he was not aware of the vast changes in the WT Act and the Rules framed thereunder and was unaware that any penalty was exigible for late submission of returns. The WTO did not accept this explanation and imposed penalty for delayed submission of return in respect of both the assessment years. The AAC confirmed the penalties, on appeal, the Tribunal held that as the matter of valuation was sub-judice before the Tribunal up to 24th Jan., 1970, the assessee was in a genuine difficulty about fixing the valuation of his property and as such the delay up to 30th June, 1970, could be said to be due to a reasonable cause, but not for the period subsequent thereto. One other question that the Tribunal considered was as to whether the rate at which penalty to be imposed for the year 1967-68, should be in accordance with the law as prevailing before 1st April, 1969, that is the date on which the rates of penalty were increased. Following the view taken by the Kerala High Court in the case of Hajee K. Assainar vs. CIT (1971) 81 ITR 423, the Tribunal held that the penalty should be imposed at the rate prevailing before the amendment, as it related to an assessment year falling earlier than when the amendment was effected in the statute. Both the Revenue and the assessee sought reference of certain questions of law to this Court and acceding to the request, the Tribunal has referred the following two questions for the opinion of this Court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in ignoring the deposition of Shri K. P. Chaterji, advocate, contained in para. 8 of his affidavit thereby upholding the penalty for the asst. yrs. 1967- 68 and 1970-71 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the penalty should be calculated on the basis of the law prevailing prior to 1st April, 1969, for the asst. yr. 1967-68 ?"
(3.) AT the outset we may dispose of the second question as the matter stands covered by a decision of our own High Court in CWT vs. Ram Narain Agrawal (1977) 106 ITR 965, wherein it has been held that for assessment years earlier to the 1st April, 1969, the rate of penalty would be governed by the Act as it stood in the relevant assessment year. The Tribunal was thus correct in imposing penalty at the lower rate.;