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Ganga Prasad Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 987 of 1976
Judge
Reported in[1980]123ITR349(All)
ActsIncome Tax Act, 1961 - Sections 271(1); Income Tax (Amendment) Act, 1968
AppellantGanga Prasad
RespondentCommissioner of Income-tax
Appellant AdvocateS.N. Verma and ;V. Singh, Advs.
Respondent AdvocateR.K. Gulati and ;A. Gupta, Advs.
Excerpt:
- - 13,000. an appeal filed against this order failed as also a further appeal to the tribunal. it is settled that a principle applied for purposes of interpreting one particular provision of a statute may not be appropriate for another provision, where the language of that provision is such that the object of the enactment would be defeated if it were applied. as section 153(1)(c) clearly indicates that the extended limitation has to be calculated from the actual date of the revised return, it is not possible to accept the contention......cit : [1977]110itr419(all) held that a revised return supplants an original return, the original return filed by the assessee became nonexistent on the filing of the revised return by the assessee on the 25th may, 1970, and as the assessee had concealed the particulars of his income in this return, the defaulter had to be punished in accordance with law as prevailing on the 25th may, 1970. we are unable to agree that amjad alt's case : [1977]110itr419(all) waters down the principle laid down in ram achal's case : [1977]106itr144(all) and the other decisions referred to earlier. in amjad alt's case, a return had been filed by the assessee concealing the substantial part of his income. subsequently, he filed a revised return which too fell short of disclosing the true income of the.....
Judgment:

C.S.P. Singh, J.

1. The Income-tax Appellate Tribunal has referred the following question of law for our opinion :

' Whether, on the facts and in the circumstances of the case, and having regard to the fact that the amount of Rs. 13,000 had been concealed in the returns filed by the assessee on October 3, 1967, and May 25, 1970, the Tribunal was justified in holding that the provisions of Section 271(1)(c) as they stood amended in 1968 would be applicable in the present case ?'

2. The assessee was a commission agent and a dealer in silver ornaments, in Agra, the business being carried on in the name and style of M/s. Verma Silver Ornaments. For the assessment year 1967-68, a return showing an income of Rs. 5,734 was filed on the 3rd October, 1967. On the 25th May, 1970, a revised return was filed showing an income of Rs. 3,246. In the course of the previous year, assessee's premises had been searched by the Central Excise Department, and certain goods comprising gold, silver, silver ornaments and cash were recovered from the premises. On enquiry being made by the ITO regarding the search it was stated by the assessee that the articles had been sent to him for sale by one Jagdish Prasad, and that out of Rs. 14,325, recovered from the premises, only Rs. 1,325 belonged to him. In the course of the raid, gold biscuits of the value of Rs. 12,000 had also been seized, which according to the assessee was worth Rs. 10,000. The assessee denied the ownership of the biscuits but later on surrendered the amount of Rs. 10,000, and also agreed to an addition of Rs. 3,000 representing the value of silver ornaments in his possession over and above that which was shown in his books. He then filed another revised return on April 1, 1971, showing his income at Rs. 19,734, which included the sum of Rs. 13,000 surrendered as above. On the basis of this return, the assessment was completed at Rs. 20,000, and proceedings under Section 271(1)(c) were initiated on 30th June, 1971. The ITO imposed a penalty of Rs. 13,000. An appeal filed against this order failed as also a further appeal to the Tribunal. There is no dispute that penalty was exigible. The only dispute is as to whether the provisions of Section 271(1)(c) as amended from April 1, 1978, would be applicable or the penalty had to be imposed by reference to the law as existing on the date when the assessee filed his original return, i.e., on 3rd October, 1967,

3. The question has been considered by this court on a number of occasions, and it has been held that the relevant return for the purposes of penalty is the original return. In the case of CIT v. Ram Achal Ram Sewak : [1977]106ITR144(All) assessment was completed for the assessment year 1963-64, thereafter notice under Section 148 was issued and in response to that the assessee filed a revised return on 9th August, 1965, disclosing the same income on which it was originally assessed. A supplementary assessment was made by including a sum of over Rs. 15,000 in the total income, and proceedings for penalty were also initiated. With effect from 1st of April, 1964, Section 271(1)(c) had been amended and an Explanation added to it. The question arose as to whether the penalty proceedings had to be decided in accordance with the amended law inasmuch as the assessee had filed a return in pursuance of the notice under Section 148 on 9th August, 1965, when the amendment to Section 271(1)(c) was already in force or under the unamend-ed law. In the case of CIT v. Ram Achal Ram Sewak : [1977]106ITR144(All) , it was held that for purposes of penalty proceedings it is the original return that has to be looked into, and as such, the penalty has to be determined in accordance with the law prevailing as on the date when the original return was filed. This decision was followed in Addl. CIT v. Krishna Subhkaran : [1977]108ITR271(All) , and recently in the case oi Addl. CIT v. Mewa Lal Sankatha Prasad : [1979]116ITR356(All) .

4. Counsel for the department has tried to dissuade us from following this decision and urged that as this court has in the case of Amjad Ali Nazir Mi v. CIT : [1977]110ITR419(All) held that a revised return supplants an original return, the original return filed by the assessee became nonexistent on the filing of the revised return by the assessee on the 25th May, 1970, and as the assessee had concealed the particulars of his income in this return, the defaulter had to be punished in accordance with law as prevailing on the 25th May, 1970. We are unable to agree that Amjad Alt's case : [1977]110ITR419(All) waters down the principle laid down in Ram Achal's case : [1977]106ITR144(All) and the other decisions referred to earlier. In Amjad Alt's case, a return had been filed by the assessee concealing the substantial part of his income. Subsequently, he filed a revised return which too fell short of disclosing the true income of the assessee. Thereafter he filed another revised return, which disclosed the correct income, but this was done by the assessee only after the ITO confronted him with the result of inquiries made by him which established that the assessee had concealed his income. It was urged before this court that inasmuch as in the revised return the assessee had not concealed any particulars of his income, there was no concealment of income on his part, and as such, no penalty under Section 271(1)(c) could be imposed. Repelling this contention this court held that a revised return cannot be filed by an assessee who has deliberately concealed the particulars of his income, and inasmuch as this was what the assessee had done in that case, the revised return filed by him was invalid, and could not absolve him of the penalty for concealment of his income, which was committed by him when he filed the original return. While dealing with this question it was also held that a revised return amends the original return, and supplants it. This case, however, does not lay down that in cases where the assessee has committed an act of concealment while filing the first return, a fresh act of concealment is committed when he files another revised return, which also conceals the real income of the assessee. In fact on the principle laid down in Amjad Ali's case : [1977]110ITR419(All) , the return filed by the assessee on the 25th May, 1970, was invalid, as the assessee had been guilty of concealment of the amount of Rs. 13,000 in the original return, and as such could not file a revised return on 25th May, 1970, for the omission to file the correct income was not due to any bona fide mistake or omission made at the first instance. We, therefore, see no conflict of opinion in Amjad Ali's case : [1977]110ITR419(All) , and the case of Ram Achal Ram Sewak : [1977]106ITR144(All) and the other decision which has followed that decision. Our attention was invited to the decision of the Orissa High Court in the case of B.N. Sharma v. CIT : [1977]110ITR538(Orissa) , wherein the view has been taken that the relevant law applicable for imposition of penalty is the law as prevailing on the date when penalty proceedings are initiated against an assessee, and not the date on which the original return is filed. This view runs directly counter to the consistent view of this court beginning from Ram Achal's case : [1977]106ITR144(All) , and with respect we are unable to subscribe. Counsel for the department also invited our attention to the decision of the Supreme Court in the case of N.A. Malbary and Bros. v. CIT : [1964]51ITR295(SC) , but we are neither able to see how that case helps the department, for, the question with which we are concerned in the present case did not arise for determination there, nor does that case lay down any principle which would affect the controversy involved. Reference to Section 153(1)(c) for the purposes of demonstrating that the view that the original return survives for purposes of imposition of penalty renders the provision futile, is misconceived. Section 153 prescribes the time-limit for completion of assessment and reassessment. Section 153(1)(c) extends that period by one year from the date of the filing of a return or revised return under Sub-section (4) or Sub-section (5) of Section 139, respectively, whichever is later. It was urged that in case the revised return is held to relate back to the date of the original return the department would be deprived of the advantage of the extended period of limitation granted under Section 153(1)(c). We do not think that such a damage is done, for the question of limitation has to be decided on the express language of Section 153(1)(c), which indicates by using the word 'whichever is latest' that for purposes of calculating the limitation the factual date on which the return or revised return under Sub-section (4) or Sub-section (5) of Section 139 is filed has to be taken into account. It is settled that a principle applied for purposes of interpreting one particular provision of a statute may not be appropriate for another provision, where the language of that provision is such that the object of the enactment would be defeated if it were applied. As Section 153(1)(c) clearly indicates that the extended limitation has to be calculated from the actual date of the revised return, it is not possible to accept the contention.

5. We, therefore, following the earlier decisions of this court answer the question in the negative in favour of the assessee, and against the department. The assessee is entitled to its costs, which are assessed at Rs. 200. Counsel fee is assessed at the same figure.


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