1. The question raised in this income-tax reference is one that has arisen on several occasions earlier. The provisions of s. 271(1)(c) of the I.T. Act, 1961, as they original stood, fixed the minimum penalty at 20 per cent of the tax sought to be evaded, but by an amendment in 1968, the minimum penalty, was changed to 100 per cent of the concealed income. In several cases, a return of income has been filed which has not revealed the entire taxable income. These returns have been filed before the amendment of 1968. However, in some cases a revised return and in some cases a return consequent to reopening of the assessment under ss. 147 and 148 of the Act has been filed after the amendment became operative. In these cases a question has arisen as to whether the penalty should be imposed on the basis of the first return or on the basis of the second return. Some judgments have taken the view that it is the last return which has to be seen because the concealment is also present in the last return. On the other hand, other judgment have taken the view that the concealment took place in the first return and hence, it is the date of the first return that determines the quantum of penalty.
2. The question referred in this case to us is as follows :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in directing that the penalty impossible under section 271(1)(c) should be computed with reference to the provisions of section 271(1) before they were amended in 1968 ?'
3. It may be seen at once that in CIT v. S. Sucha Singh Anand, [ITR] No. 174 of 1972, decided on November 16, 1981 - since reported in : 149ITR143(Delhi) , a Bench of this court has held that the concealment tool place when the original return was filed and the quantum is not to be determined by the second return filed consequent to a notice under ss. 147 and 148 of the Act. This case is on all fours and consequently determines the question arising before us.
4. However, in another judgment of this court CIT v. Mohan Dass Hassa Nand : 141ITR203(Delhi) , this point was left open. In that case, a return was filed under s. 148 repeating the same concealment that was present in the original return. But, before the filing of the return, the assessed had him self made a voluntary disclosure in September, 1967. The court came to the conclusion that the concealment was known, to the Department before the meaning of s. 271(1)(c) which could be acted upon was made in the original return In yet another case, CIT v. Kulwant Kaur [ITR No. 197, of 1976 decided, on May : 156ITR70(Delhi) , the question was whether the date of the concealment was the date of the original return or the date of the revised return. The revision of the return in that case was about certain other particulars, so the Tribunal had held that filing of the revised return made no different and the actual concealment was on the ate of the original return. This view was upheld on the findings of the Tribunal.
5. These are three judgments of this court.
6. Mr. Wadhera has referred to the judgments of some other High Court where a different view has been taken. But, at the same time, it appears that the preponderance of judgments take the view that the concealment is to be based on the original return and that view has been adopted in the aforementioned judgment in Sucha Singh Anand's case : 149ITR143(Delhi) decided by this court.
7. On the facts of the present case, it may be mentioned that the assessed filed a return showing an income of Rs. 5,950 for the assessment year 1961-62. The assessment was completed in 1962. It was then found by the Department that a house had been constructed at Ghaziabad in the name of Shrimati Waryam Kaur, wife of the assessed. There were two deposits of Rs. 10,000 and Rs. 18,500 standing in the name of Shrimati Waryam Kaur with M/s. Globe Financiers (P.) Ltd. Proceedings were taken against Shrimati Waryam Kaur under s. 148 for the same assessment year 1961-62. The two deposits amounting to Rs. 28,500 were treated as her income from undisclosed sources. The assessment of Shrimati Waryam income from undisclosed sources. The assessment of Shrimati Waryam Kaur for these amounts was upheld in appeals right up to the Tribunal.
8. However, proceedings were also initiated against the present assessed i.e., the husband under s. 147(a) of the Act, and the same amount of Rs. 28,500 plus interest was also add to the income of this assessed. This has led to the penalty proceedings under s. 271(1)(c). The Tribunal has not accepted the plea of the assessed that the penalty could not be held to be exigible. The husband had himself filed a revised return including the sum taxed in his wife's hands and it is that revised return which has led to the imposition of the penalty. The revised return was filed on January 1971. The return in response to the notice under s. 148 was filed on May 25, 1970, and showed the income as Rs. 5,950. As both these returns were filed after 1968, the penalty was imposed by the ITO on the application of the amendment. But the Tribunal was of the view that the penalty had to be imposed according to the law application when the original concealment took place. that is, in accordance with the judgment in Sucha Singh Anand's case : 149ITR143(Delhi) aforementioned.
9. It is necessary to emphasise the fact that Shrimathi Waryam kaur was assessed for the same income on the basis that the Department Discovered that she had constructed a house at Ghaziabad. That assessment was made on April 30, 1966. So, the Department was fully aware of the concealment before April 30, 1966.
10. The only question before the Department was whether to tax the amount in the hands of Shrimathi Waryam kaur or in the hands of the present assessed.
11. The ITO, B-Ward, Ghaziabad, while assessing Shrimati Waryam Kaur, made the following observations :
'However, it may not be impossible that this income might have been earned by or through her husband, Gurbhachan Singh. The jurisdiction over Gurcharan Singh rests with the ITO, Delhi, and he would be free to take any action against him and if he decides to include this income in the hands of Shri Gurbhachan Singh, the assessment made here would be cancelled. It is made primarily as a protective measure.'
12. On the facts of this case, it is difficult to hold that the concealment by the assessed was made when he filed a return on May 25, 1970, in response to the notice under s. 148. The concealment, if any, took place when he did not reveal this income in the original return.
13. There was no concealment when the revised return was filed because the entire facts were known to the Department on April 30, 1966, when Shrimati Waryam kaur was assessed. This proposition can be stated in another way. A notice was issued under s. 147(a) by the ITO. Such a notice could only be issued on the basis of a previous concealment. That is what s. 147(a) states. The concealment was in the return filed in 1962. It was on the basis of that concealment that the notice was issued. It would follow that the penalty has also to be imposed for the same concealment concerning which a notice was issued under s. 147(a). In other words, there was no concealment in 1970. The facts were known to the Department in 1966, so the concealment must necessarily had to be earlier, and, consequently, the provision of the Act as they stood in 1966 or earlier had to be applied to this case.
14. The mere fact that the assessed filed a return showing the same income in 1970, was on the basis that the income had to be included in the hands of his wife. This was a question of opinion and not a case of concealment. Later on, the assessed accepted the fact that the amount should be added to the income of his wife, so he filed a revised return. Nevertheless, the concealment was in 1962 and not in 1970, when the facts were already known to the Department.
15. We would, thereforee, in the present case, follow the judgment in Sucha Singh Anand's case : 149ITR143(Delhi) and answer the question referred to us in the affirmative on the view that s. 271(1)(c) had to be applied to this case as it stood before the amendment in 1968.
16. There will be no order as to costs as there is no appearance for the assessed.