V.K. Singhal, J. - (1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, has referred the following two questions of law arising out of its order dated August 1, 1980, in respect of the assessment year 1966-67 ; " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the concealment in this case took place only on July 24, 1967, when the original return was filed and, therefore, the penalty was leviable on the basis of law applicable on that date ?
(2.) WHETHER the Tribunal was justified in upholding the finding of the Appellate Assistant Commissioner in reducing the penalty from Rs. 7,118 to Rs. 1,000 ?" 2. The brief facts of the case are that the assessment of the assessee was initially completed on the total income of Rs. 5,159 on August 28, 1967. Later on, it came to the notice of the assessing authority that the assessee is doing his business mainly in gold outside the books of account and accordingly proceedings under Section 147 were initiated. This reassessment was completed on February 11, 1972, on the total income of Rs. 10,139. This order was set aside in appeal on August 21, 1978, and the final order was framed on November 30, 1976, (?) on a total income of Rs. 33,860 in which the income from gold business was assessed at a figure of Rs. 28,719. The appeal preferred before the Appellate Assistant Commissioner against the assessment order was dismissed. However, the Income-tax Appellate Tribunal has reduced the addition of Rs. 28,719 to Rs. 7,118, vide its order dated September 30, 1978, on the ground that the income has to be spread over proportionately for the assessment years 1963-64, 1964-65, 1965-66 and 1966-67. The Income-tax Officer thereafter initiated proceedings under Section 271(1)(c) and after giving opportunity levied a penalty of Rs. 7,118. An appeal was preferred against the order of penalty and the contention of the assessee that it is not a fit case for levy of penalty was rejected on the merits. On the contention with regard to the quantum of penalty, it was held that it is not the date of recording of satisfaction for issue of a show-cause notice for levy of penalty which would be relevant as it may differ in different cases depending upon when the assessment is completed and would create uncertainty and application of different yardsticks in different cases. The Appellate Assistant Commissioner came to the conclusion that the quantum of penalty is to be worked out on the basis of the law in force as on the date of filing of the original return, i.e., July 24, 1967, when the default was committed and accordingly, it was found that the minimum penalty worked out to Rs. 183 and the maximum at Rs. 1,371 and so the penalty of Rs. 1,000 was sustained. Against the order of the Appellate Assistant Commissioner, the Income-tax Officer preferred an appeal before the Income-tax Appellate Tribunal, Bombay Bench, 'A' Camp at Jaipur, who also came to the conclusion that the concealment, if any, was committed on the date when the original return was filed. The submission of standing counsel for the Department is that the law is applicable as on the date when the satisfaction of the Income-tax Officer is recorded and the order of the Income-tax Appellate Tribunal is not in accordance with law. We have considered the matter. The point in dispute is covered by the decision of this court given in the case of Chunnilal Mahajan v. CIT [1987] 163 ITR 172 in which it was held that (headnote): "For concealment of particulars of income or for furnishing inaccurate particulars of income, penalty is to be imposed under Section 271(1)(c) of the Income-tax Act, 1961, according to the law prevailing on the date on which the act of concealment took place, i.e., the date on which the original return was filed, and it is wholly immaterial that the income concealed was to be assessed in relation to an assessment year in the past. The law prevailing on the date of passing of the assessment order or the initiation of penalty proceedings is also wholly immaterial for purpose of imposition of penalty". The matter was again examined by this court in the case of CIT v. Kanhaiyalal Ghatiwala [1989] 180 ITR 338, where also it was held that the law applicable would be that prevailing on the date of filing of the original return and not the date of filing of the subsequent return for the purpose of levy of penalty for concealment of income under Section 271(1)(c) of the Income-tax Act, 1961. The matter has finally been settled by the apex court in CIT v. Onkar Saran and Sons [1992] 195 1TR 1, wherein, it has been held that, for the purpose of concealment, the penalty has to be levied on the basis of the original return filed.
(3.) THE provisions of Section 271(1)(c) provide that if the Income-tax Officer, in the course of any proceedings, is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, then he may direct that such person shall pay by way of penalty the amount specified in Clause (iii) of that sub-section. THE word "satisfaction" which has been used is for the purpose of initiating the penalty and assuming the jurisdiction and the offence is committed when the particulars are concealed or inaccurate particulars are furnished in respect of the income which could be by furnishing the return and, therefore, the offence is committed at the time when initially the return is submitted. In these circumstances, we are of the view that the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal were justified in coming to the conclusion that the concealment in this case took place only on July 24, 1967, when the original return was filed and, therefore, penalty was leviable on the basis of the law applicable on that date. Consequently, the Income-tax Appellate Tribunal and the Appellate Assistant Commissioner were justified in reducing the penalty from Rs. 7,118 to Rs. 1,000. The above position of law is duly settled by the decision of the apex court referred to above and the decision of this court. Accordingly, the reference is answered in favour of the assessee and against the Revenue. No orders as to costs. ;