1. This order will dispose of Income-tax References Nos. 11 of 1968 and 33 and 35 of 1969. We would only advert to the facts in Income-tax Reference No. 11 of 1968, and it is not necessary to advert to the facts of the other cases.
2. The Income-tax Appellate Tribunal (Delhi Bench ' B ') has referred the following question of law for our determination ;
'Whether, on the facts and in the circumstances of the case, the penalty levied under Section 271(1)(a) of the Income-tax Act, 1961, had been validly reduced from Rs. 11,543 to Rs. 1,000 ?'
3. The reasons that have been recorded by the Tribunal in effecting the reduction may be stated in their own words :
' Penalty for an offence must be in consonance with the Act as was in force at the time when the offence was committed. Section 28(1)(a) does not prescribe any minimum limit of penalty. It has to be decided on the facts and circumstances of each case. Now, therefore, in the instant case, we find the delay is not so much as to call for such a heavy penalty. In our opinion, a penalty of Rs. 1,000 will meet the ends of justice.'
4. The facts found are that for the assessment year 1959-60, the return which was due to be filed on or about 27th of May, 1959, was filed on 28th November, 1960, after a delay of 18 months. The assessee's explanation for delay was that the notice under Section 22(2) was received by Radhd Kishan. He was in indifferent health and did not comply with it. He also did not inform any other partner about it. Radha Kishan died on 9th October, 1959. It was long after his death that the other partners came to know about the notice under Section 22(2). They complied with the notice on 28th November, 1960. This explanation was not accepted by the departmental authorities. The Tribunal also did not accept this explanation. The departmental authorities acted under Section 271(1)(a) of the 196J Act and imposed a penalty of Rs. 11,543. According to the statement of the case, this penalty was imposed at the rate of 2% for each month of default. The Tribunal, though maintaining the penalty, proceeded on the basis that the provisions of the 1922 Act were applicable. It is true that they did not say so in fact, but in substance this seems to be the basis on which theyproceeded. The question which Act is applicable in the circumstances stated above, has been settled by the Supreme Court in Jain Brothers v. Union of India : 77ITR107(SC) . There is no dispute that the assessment was completed when the 1961 Act came into force on April 1, 1962. Therefore, the order of the Tribunal is clearly wrong, and the answer to the question referred must be answered in favour of the department.
5. But there is one matter which the Tribunal has not determined, namely, whether the amount of Rs. 11,543 has been correctly worked out on the basis of 2% as provided under Section 271(1) (a) and (i)? The learned counsel for the department agreed that the Tribunal may examine this matter now and impose the penalty at that rate. If the penalty works out at a figure of less than Rs. 11,543 then it should give relief to the assessee on that basis. It is conceded that, in any case, the penalty cannot be increased over and above Rs. 11,543.
6. With these observations, we answer the question referred in the negative. There will be no order as to costs.