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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Sambasiva Rao
  • A.C.J
  • Muktadar, J.
Acts
  • SECTION 147 INCOME TAX ACT 1961
  • provisions of Section 271(1)(iii)
  • provisions of Section 297(2)(g)
  • provisions of Section 271(1)(c)
  • 50 (HL). 5. Section 271(1)(c)(iii)
  • 1, 1968, Section 271(1)(c)(iii)
  • Section 271(1)(c)(iii)
  • section 297(2)(g)
  • Section 271(1)(c)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Sambasiva Rao
  • A.C.J
  • Muktadar, J.
Acts
  • SECTION 147 INCOME TAX ACT 1961
  • provisions of Section 271(1)(iii)
  • provisions of Section 297(2)(g)
  • provisions of Section 271(1)(c)
  • 50 (HL). 5. Section 271(1)(c)(iii)
  • 1, 1968, Section 271(1)(c)(iii)
  • Section 271(1)(c)(iii)
  • section 297(2)(g)
  • Section 271(1)(c)
See more information ...
Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The Income-tax Appellate Tribunal referred the following question for determination: whether, on the facts and circumstances of the case, the quantum of penalties should be as per the amended provisions of Section 271(1)(c)(iii) brought into effect from April 1, 1968.

Relevant facts and procedural history (as stated in the opinion):

  • The assessee is an individual who filed original income-tax returns for assessment years 1965–66, 1966–67 and 1967–68 on June 30, 1965; August 1, 1966; and September 4, 1967 respectively. The original assessments based on those returns were completed before April 1, 1968.
  • The Income-tax Officer later noticed that the assessee had not disclosed income from the business of exhibition of films and issued a notice under Section 147(a) of the Income-tax Act, 1961.
  • The assessee filed revised returns on November 26, 1969, and March 24, 1970 (for two years on the latter date), including income from a picture house he owned and had leased to M/s. Merla China Veeranna and others from June 27, 1958 for ten years. The revised returns were accepted by the Income-tax Officer on October 22, 1970.
  • Despite acceptance of revised returns, the Income-tax Officer initiated penalty proceedings. The matter was referred under Section 271(1)(c) to the Inspecting Assistant Commissioner of Income-tax who, by separate orders dated March 22, 1973, levied a minimum penalty of Rs. 1,810 for each assessment year on grounds that the omission attracted Section 271(1)(c) as amended on April 1, 1968, and that the Explanation placed the onus on the assessee to demonstrate absence of fraud or gross wilful neglect, which the assessee failed to discharge.
  • The assessee appealed to the Appellate Tribunal. The Tribunal held the assessee liable for penalty under Section 271(1)(c) on the merits but concluded the quantum should be determined according to the law as it stood prior to April 1, 1968 (i.e., the date of filing the original returns), because the omission occurred at the time of filing the original returns. That conclusion prompted the reference to the court to decide which version of the statute governed the quantum of penalty.

Legal Issues Presented

  1. Whether the quantum of penalty for concealment under Section 271(1)(c)(iii) should be determined according to the amended provisions effective from April 1, 1968 (i.e., the law as on the date of completion of reassessment / satisfaction of the assessing authority), or according to the law as it stood on the date when the concealment occurred (i.e., the date of filing of the original returns)?
  2. More specifically, whether the relevant date for fixing the quantum of penalty is the date of filing the return in which concealment took place, or the date of completion of assessment (and satisfaction of the Income-tax Officer or Appellate Assistant Commissioner) during penalty proceedings.

Arguments of the Parties

Revenue (Mr. P. Rama Rao, standing counsel)

  • The Appellate Tribunal erred in holding that the offence of concealment was committed at the time of filing the original returns and that therefore pre-amendment law should apply.
  • Once reassessment proceedings are initiated the original assessment is set aside; the phrase "in the course of any proceedings" in Section 271(1)(c) points to the date of completion of assessment (when the officer is satisfied) as the relevant date for determining quantum of penalty.
  • Since reassessment proceedings were completed on October 22, 1970, it was contended that the law as on that date (post-amendment) should govern the quantum of penalty.
  • Authorities cited in support included: Commissioner of Income-tax v. T. Raja and Satyanarayana Murthy; Jain Brothers v. Union of India; and Commissioner of Wealth-tax v. K. Butchaiah (R.C. No. 49/69 dated October 22, 1971).

Assessee and Amicus (Mr. Y. V. Anjaneyulu, Mr. Dasaratharama Reddy; Mr. Poornaiah for the assessee)

  • Contended that the quantum of penalty should be levied according to the law as it stood on the date of filing the returns because concealment occurred when the original returns were filed. Section 271(1)(c)(iii) penalises concealment; the relevant date is the date of the concealment (filing), not the date when the assessing officer becomes satisfied.
  • Cited a list of authorities said to support that the date of filing is the relevant date: Commissioner of Income-tax v. Ramchand Kundanlal Saraf; Commissioner of Income-tax v. Devendra Singh; Commissioner of Income-tax v. Data Ram Satpal; Commissioner of Gift-tax v. C. Muthukumaraswamy Mudaliar; Commissioner of Income-tax v. Bhan Singh Boota Singh; Commissioner of Income-tax v. K. Ahamed [FB]; Karimtharuvi Tea Estate Ltd. v. State of Kerala; Rajputana Stores v. Inspecting Assistant Commissioner of Income-tax; Continental Commercial Corporation v. Income-tax Officer; Fair-deal Motors v. Commissioner of Income-tax; Shakti Offset Works v. Inspecting Assistant Commissioner of Income-tax [1967] 64 ITR 637 (Bom); and Commissioner of Income-tax v. Vedlapatla Veera Venkataramiah [1943] 11 ITR 308 (Mad).
  • Mr. Poornaiah additionally argued that penalty proceedings are quasi-criminal in nature, so the penalty should be determined as at the date of the offence (date of concealment), relying on Commissioner of Income-tax v. Bhan Singh Boota Singh and Fattorini (Thomas) (Lancashire) Ltd. v. Inland Revenue Commissioners [1942] AC 643; [1943] 11 ITR (Supp) 50 (HL).
  • It was further submitted that the authorities relied upon by the revenue were distinguishable because those decisions were based on interpretation of Section 297(2)(g) which expressly made the date of completion of assessment determinative; that specific provision is not present in Section 271(1)(c).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court (as stated in the opinion)
Commissioner of Income-tax v. T. Raja and Satyanarayana Murthy Cited by revenue for the proposition that the date of completion of assessment is the relevant date (interpretation of section 297(2)(g)). The court recorded that this authority (and similar ones) interpreted section 297(2)(g) and therefore are not relevant to Section 271(1)(c) in the present case; the court rejected reliance on it.
Jain Brothers v. Union of India Cited by revenue to support that the date of completion of assessment is determinative (interpretation of section 297(2)(g)). The court noted Jain Brothers was decided on wording of section 297(2)(g); because that section specifically provided completion date determinative, the court held Jain Brothers is not relevant to the present question under Section 271(1)(c).
Commissioner of Wealth-tax v. K. Butchaiah (R.C. No. 49/69 dated October 22, 1971) Relied on by revenue; the opinion states this judgment was based on Fain Brother's case. The court observed that this judgment does not help the revenue because it was founded on a different authority (Fain Brother's case) and did not consider the specific point decided in Jain Brothers under section 297(2)(g).
Ramchand Kundanlal Saraf (Commissioner of Income-tax v. Ramchand Kundanlal Saraf) Cited by counsel for the assessee to support that the relevant date for penalty is date of filing (date of concealment). The court stated that the ratio of this ruling (and others cited for the same proposition) conforms to the view that the date of filing of the return in which concealment occurred is the relevant date for fixing quantum of penalty.
Commissioner of Income-tax v. Devendra Singh Cited for the proposition that the date of concealment (filing) is the relevant date for penalty quantum. The court indicated that the ratio established by this and similar rulings supports the court's conclusion that the date of filing is the relevant date.
Commissioner of Income-tax v. Data Ram Satpal Cited to support that quantum should be determined by reference to date of filing (date of concealment). The court grouped this ruling with other authorities whose ratios conform to the view adopted by the court (date of filing governs quantum).
Commissioner of Gift-tax v. C. Muthukumaraswamy Mudaliar Cited by counsel for the assessee to support reliance on the date of filing. The court noted that the ratio of such rulings is consistent with its conclusion that the date of filing is the relevant date for penalty quantum.
Commissioner of Income-tax v. Bhan Singh Boota Singh Cited by the assessee for two points: (a) support for date-of-filing rule; (b) cited by counsel to show quasi-criminal nature of penalty proceedings. The court acknowledged this ruling among those whose ratios support the date-of-filing principle; the quasi-criminal character argument also formed part of the assessee's submissions which the court considered in context of criminal jurisprudence principles.
Commissioner of Income-tax v. K. Ahamed [FB] Cited in support of the assessee's contention that date of filing is relevant. The court recorded that the ratio of this ruling conforms to the view that the date of filing is the relevant date for fixing penalty quantum.
Karimtharuvi Tea Estate Ltd. v. State of Kerala Cited for the proposition that penalty quantum should follow law as at date of offence (date of filing). Included among the rulings whose ratio the court considered consonant with its conclusion favoring date of filing as the relevant date.
Rajputana Stores v. Inspecting Assistant Commissioner of Income-tax Cited to support assessee's position that date of filing governs penalty quantum. The court observed that the ratio of this ruling aligns with its view that the date of filing of the return in which concealment took place is the appropriate reference date.
Continental Commercial Corporation v. Income-tax Officer Cited by the assessee in support of the date-of-filing principle. The court grouped this case with other authorities whose ratio supports using the date of filing as the relevant date for quantum.
Fair-deal Motors v. Commissioner of Income-tax Cited for the same proposition (date of filing controls quantum of penalty). The court indicated this ruling's ratio conforms to the court's view that the date of filing is the relevant date.
Shakti Offset Works v. Inspecting Assistant Commissioner of Income-tax [1967] 64 ITR 637 (Bom) Cited as supporting authority for the assessee's argument that the date of filing is the relevant date for penalty quantum. The court stated that its ratio is consistent with the conclusion that the date of filing governs the quantum of penalty.
Commissioner of Income-tax v. Vedlapatla Veera Venkataramiah [1943] 11 ITR 308 (Mad) Cited by the assessee in support of the date-of-filing rule. The court included this case among those whose ratios conform to the court's view that the date of filing is the relevant date for quantum determination.
Fattorini (Thomas) (Lancashire) Ltd. v. Inland Revenue Commissioners [1942] AC 643; [1943] 11 ITR (Supp) 50 (HL) Cited by the assessee to support the submission that penalty proceedings are quasi-criminal and the penalty should be determined by reference to the date of the offence. The court considered the general criminal jurisprudence principle (that the penalty provided at the time of commission of an offence is the one to be applied unless otherwise provided) in its reasoning. The precedent was cited in support of that general principle.
Fain Brother's case Mentioned in the opinion as the basis on which the Bench decided Commissioner of Wealth-tax v. K. Butchaiah. The court noted that the K. Butchaiah judgment was based on this case; consequently K. Butchaiah did not assist the revenue on the present point because it did not consider the specific issue decided in Jain Brothers under section 297(2)(g).

Court's Reasoning and Analysis

The court conducted a textual and purposive analysis of Section 271(1)(c)(iii) and of the submissions advanced by both sides. The principal steps in the court's reasoning are as follows:

  • Textual requirement for levy: The court observed that Section 271(1)(c)(iii), in substance, requires the Income-tax Officer or the Appellate Assistant Commissioner to be "satisfied" that the assessee "has concealed the particulars of his income or furnished inaccurate particulars" before a penalty may be levied.
  • Meaning of "satisfaction": From the natural reading of the words, the court held that the statute requires the assessing authority to be satisfied that an offence of concealment has been committed before penalty can be directed. However, the court found nothing in the wording of Section 271(1)(c) from which it could be inferred that the date when the officer attains satisfaction is to be equated with the date of the offence for the purpose of fixing quantum.
  • Cardinal principle of criminal jurisprudence: The court applied a well-known principle that, unless expressly or by necessary implication provided otherwise, the penalty applicable is the one that was in force at the time of commission of the offence rather than the penalty in force at the time of detection or conviction. The court emphasised the importance of certainty in penalty proceedings and illustrated the problematic results that would follow if quantum were to depend on administrative timing of assessment completions.
  • Precedents and their relevance: The court said it was not necessary to detail every ruling relied upon by the assessee; it sufficed to state that the ratio in those cases supported the court's view that the relevant date for fixing the quantum is the date of filing (date of concealment). Conversely, the court explained that authorities relied upon by the revenue (such as T. Raja and Jain Brothers) were decisions interpreting Section 297(2)(g), a provision that specifically made the date of completion of assessment determinative; hence those authorities are distinguishable and not relevant to the present issue under Section 271(1)(c).
  • Conclusion of analysis: After considering the statutory wording, the criminal jurisprudence principle, practical considerations of certainty, and the persuasive authorities cited, the court concluded that the correct rule for Section 271(1)(c)(iii) is that the relevant date for determining the quantum of penalty is the date on which the return was filed in which concealment of income occurred, and not the later date on which the assessing authority completes reassessment and becomes satisfied.

Holding and Implications

Holding: The court answered the reference against the revenue and in favour of the assessee: for purposes of Section 271(1)(c)(iii), the relevant date for determining the quantum of penalty is the date of filing of the return in which concealment of income took place, and not the date of completion of assessment or the date when the Income-tax Officer or Appellate Assistant Commissioner attains satisfaction.

Implications (direct effects):

  • Direct effect on the parties in this case: The quantum of penalty must be calculated with reference to the law as it stood on the dates when the original returns were filed (i.e., prior to the amendment effective April 1, 1968), rather than by reference to the law as on the date of completion of reassessment in 1970. The reference was therefore answered in favour of the assessee, with costs and an advocate's fee of Rs. 250.
  • Broader implications: The opinion reasons that, for Section 271(1)(c)(iii), certainty requires that the date of the offence (filing/concealment) be the reference date for quantum unless the statute explicitly provides otherwise (as Section 297(2)(g) does). The court distinguished prior authorities which turned on an express provision to the contrary. The opinion does not purport to set out further novel limitations beyond this interpretive conclusion.

Reported disposition in the opinion: reference answered against the revenue and in favour of the assessee; costs awarded (advocate's fee Rs. 250).

Show full summary ...

    Addl. Commissioner Of Income-Tax, A.P v. Medisetty Ramarao.

    1. The Income-tax Appellate Tribunal has posed the following question for our consideration :

    "Whether, on the facts and in the circumstances of the case, the quantum of penalties to be levied should be as per the amended provisions of Section 271(1)(iii) brought into effect from April 1, 1968 ?"

    2. In order to appreciate the question, it is necessary to relate certain relevant facts which are these :

    The assessee is an individual. For the assessment years 1965-66, 1966-67 and 1967-68, he had filed his returns, originally on June 30, 1965, August 1, 1966, and September 4, 1967, respectively. The original assessment on the basis of the above returns was completed some time prior to April 1, 1968. Later it dawned on the Income-tax Officer that the assessee had not disclosed the income accruing from the business of exhibition of films. Notice under Section 147(a) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), was issued, and in answer thereto, the assessee filed the revised returns on November 26, 1969, March 24, 1970, and March 24, 1970, for the respective assessment years mentioned above. In these revised returns, the assessee included the income which accrued to him from the picture house of which he was the owner, and which cinema theatre he had leased to M/s. Merla China Veeranna and others from June 27, 1958, for ten years. The revised returns were accepted by the Income-tax Officer on October 22, 1970 ; nevertheless, he initiated proceedings for the levy of penalty. Since the minimum penalty leviable, according to the Income-tax Officer, was more than Rs. 1,000 for each assessment year, he referred the penalty proceedings under Section 271(1)(c) of the Act to the Inspecting Assistant Commissioner of Income-tax who by his separate orders dated March 22, 1973, for each oi the assessment years, levied a minimum penalty of Rs. 1,810 yer year. The reason assigned by the Inspecting Assistant Commissioner was that it was a clear case of omission, on the part of the assessee, to disclose the income from the cinema theatre business which attracted the provisions of Section 271(1)(c) as amended on April 1, 1968, and the Explanation to that Section being applicable, the onus was on him to prove that the failure to return the corrrect income did not arise from any fraud or gross or wilful neglect on his part, which onus was not discharged by the assessee. Aggrieved by the orders of the Inspecting Assistant Commissioner, the assessee preferred three separate appeals to the AppelJate Tribunal which by a common order partly allowed the appeals. The Appellate Tribunal rejected the contentions advanced by the assessee on the merits of the case, and held that he was clearly liable for penalty under Section 271(1)(c) of the Act. But, with regard to the quantum of penalty, it came to the conclusion that since the original returns were filed on June 30, 1965, August I, 1966, and September 4, 1967, for the three assessment years referred to above, the omission to disclose the income from the cinema business could be said to have been made at the time of the filing of the returns, if not earlier, and, therefore, the law with regard to the quantum of penalty as it stood prior to April 1, 1968, was applicable. In other words, the Appellate Tribunal was of the opinion that the offence of concealment was committed at the time of the filing of the original returns, i.e., long prior to April 1, 1968, when the law on the subject was amended and, therefore, the unamended law as it stood prior to April 1, 1968, was applicable. Hence, the above reference. The reason which prompted this reference appears to be that before April 1, 1968, Section 271(1)(c)(iii) of the Act provided for a different quantum of penalty for concealment of income, which was less onerous than the quantum of penalty provided for after April 1, 1968. Before April 1, 1968, Section 271(1)(c)(iii) provided:

    "(1) If the Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person--.....

    (c) has concealed the particulars of his income or furnished inaccurate particulars of such income,--

    he may direct that such person shall pay by way of penalty,--.....

    (iii) in the cases referred to in Clause (c), in addition to any tax payable by him, a sum which shall not be less than twenty per cent. but which shall not exceed one and a half times the amount of the tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income."

    3. After April 1, 1968, Section 271(1)(c)(iii) provided :

    "(1) If the Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person--...

    (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,--...

    (iii) in the cases referred to in Clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished."

    4. Mr. P. Rama Rao, the learned standing counsel for the revenue, contends that the Appellate Tribunal fell into error in holding that the offence of concealment was committed at the time of filing the original returns and, therefore, the law as it stood on that date should be applicable. He submits that although penalty proceedings are with respect to original returns, nevertheless, once reassessment proceedings are initiated, the original assessment is set aside and, therefore, having regard to the words, "in the course of any proceedings" used in Section 271(1)(c). it would only mean that the date of completion of assessment would be the relevant date for the purpose of levy of penalty at the quantum provided by the Act on that date. He, therefore, submits that since the reassessment proceedings were completed on October 22, 1970, it was only then the Income-tax Officer was satisfied that concealment had taken place and, therefore, in this case, the law with respect to the quantum of the penalty as it stood on that day would be relevant and not the law as it stood prior to the amendment on April 1, 1968. In support of his contention, that the date of completion of assessment is the relevant date, Mr. Rama Rao has cited Commissioner of Income-tax v. T. Raja and Satyanarayana, Murthy , Jain Brothers v. Union of India and the judgment in R.C. No. 49/69 dated October 22, 1971 (Commissioner of Wealth-tax v. K. Butchaiah ). It appears that several references are pending in this court on the same question. Since those cases are not ready for being posted, we asked Mr. Y. V. Anjaneyulu and Mr. Dasaratha-

    rama Reddy to assist the court as amicus curiae and we are pleased to state that these two gentlemen at Bar readily accepted our suggestion.

    4. Mr. Y. V. Anjaneyulu contended that the quantum of penalty should be levied according to the law as it stood not on the date of completion of assessment, but on the date of filing of the returns, as it is on that date by concealing his income, the assessee has committed the offence of concealment of income because Section 271(1)(c)(iii) provides for the levy of penalty for concealment of income. According to him, Section 271(1)(c)(iii) does not envisage the satisfaction of the Income-tax Officer with regard to the concealment as the relevant date but that section has relevancy to the date of concealment, and that date could only be when the assessee filed his original assessments concealing the income. In support of his contention, he has cited Commissioner of Income-tax v. Ramchand Kundanlal Saraf , Commissioner of Income-tax v. Devendra Singh , Commissioner of Income-tax v. Data Ram Satpal , Commissioner of Gift-tax v. C. Muthukumaraswamy Mudaliar , Commissioner of Income-tax v. Bhan Singh Boota Singh , Commissioner of Income-tax v. K. Ahamed [FB], Karimtharuvi Tea Estate Ltd. v. State of Kerala , Rajputana Stores v. Inspecting Assistant Commissioner of Income-tax , Continental Commercial Corporation v. Income-tax Officer , Fair-deal Motors v. Commissioner of Income-tax , Shakti Offset Works v. Inspecting Assistant Commissioner of Income-tax [1967] 64 ITR 637 (Bom) and Commissioner of Income-tax v. Vedlapatla Veera Venkataramiah [1943] 11 ITR 308 (Mad). He further submitted that the rulings relied upon by Mr. Rama Rao have no relevancy to the facts of this case because both the Supreme Court and the Bench of this court were interpreting the provisions of section 297(2)(g) in those cases, and section 297(2)(g) specifically provided that the law as it stood on the completion of assessment should be the law applicable. Therefore, he submits that in those rulings, due to the provisions of section 297(2)(g), the courts had no alternative but to hold that the date of completion of assessment was the relevant date. Mr. Dasaratharama Reddy adopted the arguments advanced by Mr. Anjaneyulu, and Mr. Poornaiah appearing for the assessee contended that penalty proceedings are quasi-criminal in nature and, therefore, penalty should be levied as on the date of the offence and not on the date of conviction and in support of this submission he cited Commissioner of Income-tax v. Bhan Singh Boota Singh and Fattorini (Thomas) (Lancashire) Ltd. v. Inland Revenue Commissioners [1942] AC 643 ; [1943] 11 ITR (Supp) 50 (HL).

    5. Section 271(1)(c)(iii) so far as it is relevant for purposes of this case reads:

    "(1) If the Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person--...

    (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,--...

    (iii) in the cases referred to in Clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished."

    6. A close reading of the section reveals that what all is required for the levy of penalty is the satisfaction of the Income-tax Officer or the Appellate Assistant Commissioner that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. Giving the natural meaning to the words employed in the section, what emerges is that the Income-tax Officer has to be satisfied that the offence of concealment of income or the offence of furnishing inaccurate particulars of income has been committed before he could levy a penalty. It is not possible to deduce from the words employed in the section that the date of satisfaction of the income-tax authorities would be the date of offence. Moreover, it is a cardinal principle of criminal jurisprudence that, unless otherwise provided expressly or by necessary implication, the penalty that was provided for at the time of the commission of the offence would be the proper penalty to be levied, and not the penalty that was provided for at the time of conviction of the offender. In other words, penalty for infraction takes place not when it is detected but when it actually has been committed. To illustrate in a concrete form, for the assessment year 1968-69 if two different assessees file their returns on the same day and for some administrative reasons, the Income-tax Officer completes one assessment in 1971 and the other in 1972, and on completion of the two assessments, the Income-tax Officer is satisfied that concealment of income has been committed by the two assessees, would the Income-tax Officer be justified in levying the penalty as it stood in 1971 in the case of one assessee and the penalty as it stood in 1972 in the case of the other, when the offence of concealment has taken place on one and the same day. Our answer is that it would not be proper for the Income-tax Officer or the Appellate Assistant Commissioner to adopt such a course when it is not so expressly or by necessary implication provided in the Act because the element of certainty is an important factor in penalty proceedings. Hence, to our mind, it is not possible to cull out from the wording of Section 271(1)(c) that the date of satisfaction of the Income-tax Officer that the concealment has taken place would be the relevant date for fixing the quantum of penalty as it stood in the section on that date. It is not necessary to load this judgment by detailing the rulings relied upon by Mr. Anjaneyulu. Suffice it to say that the ratio established in these rulings conform to the view we have taken as indicated above, viz., that the relevant date for fixing the quantum of penalty as it stood in the Act for concealment of income would be the date of the filing of the return and not the date of completion of assessment and the satisfaction of the authorities. The ruling relied upon by the learned counsel for the revenue have no relevancy to the case on hand because in both Commissioner of Income-tax v. T. Raja and Satyanarayana Murthy and Jain Brothers v. Union of India , a Bench of this court and the Supreme Court, respectively, were interpreting section 297(2)(g) of the Act, and in doing so, came to the conclusion that the date of completion of the assessment would be the relevant date. It would be noted that section 297(2)(g) of the Act specifically provided that the date of the completion of the assessment would be determinative for the purpose of levying penalty. The judgment of a Bench of this court in R.C. No. 49/69 dated October 22, 1971 [Commissioner of Wealth-tax v. K. Butchiah ] relied upon by Mr. Rama Rao does not help the revenue, because that judgment was based on fain Brother's case and the Bench had no occasion to consider that Jain Brother's case was decided on the wording employed in section 297(2)(g) of the Act.

    7. Hence, in the ultimate analysis, we hold that for purposes of Section 271(1)(c)(iii), the date of filing of the returns in which concealment of income has taken place would be the relevant date to be taken into account for the purpose of levying the quantum of penalty as it stood in the Act on that date, and not the date of completion of assessment, and the satisfaction of the Income-tax Officer or the Appellate Assistant Commissioner. The reference is, therefore, answered against the revenue and in favour of the assessee, with costs. Advocate's fee Rs. 250.

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    Comments

    Addl. Commissioner Of Income-Tax, A.P v. Medisetty Ramarao.
    (Dec 26, 1975)