(Appeal from the judgment and order, dated August 23, 1977, in Special Jurisdiction Case No. 150 of 1975).

Income-tax---

----Penalty---Concealment of income---Quantum of penalty---Change of law---Penalty to be worked out on basis of law in force at time of filing return, whether original and/or revised---Indian Income Tax Act, 1961, S.271(1)(c)(iii)---[B.N. Sharma v. C.I.T. (1977) 110 ITR 538 reversed].

The amount of penalty for concealment of income should be worked out on the basis of the law in force at the time of filing of the return, whether original and/or revised which contained the alleged concealment or misstatement.

B.N. Sharma v. C.I.T. (1977) 110 ITR 539 reversed.

C.LT. v. Onkar Saran & Sons (1992) 195 ITR 1 (SC) fol.

Jayanta Das, Senior Advocate (G.S. Chatterjee and Ms. Aruna Banerjec, Advocates with him) for Appellant.

V. Gauri Sankar, Senior Advocate (Ms. A Subhashini and S.N. Terdol, Advocates with him) for Respondent.

JUDGMENT

This appeal has to be allowed following the decision of this Court in CIT v. Onkar Saran & Sons (1922) 195 ITR 1. The question referred for the opinion of the High Court under section 256(2) of the Income-tax Act was (see (1977) 110 ITR 538, 539)-

"Whether the amount of penalty imposable should have been worked out on the basis of the law in force at the time the return was filed and the delinquency of excluding the part of the income had been committed ?"

The High Court has answered the said question holding (at page 540):

"Our answer, therefore, to the question is : The amount of penalty imposable is to be worked out on the basis of the law in force on the date the Income-tax Officer directed initiation of the proceeding under section 271 (1)(c) of the Act."

It is, however, held by this court in Onkar Saran & Sons' case (1922) 195 ITR 1, that in such case it is the law obtaining on the date of the filing of the return which contains the concealment or misstatement, as the case may be, that is relevant and not the date on which the penalty proceedings are initiated. Accordingly, the question is answered in the following words:

"The amount of penalty imposable should be worked out on the basis of the law in force at the time of filing of the return whether original and/or revised which contained the alleged concealment or misstatement. "

The appeal is allowed in the above terms. No costs.

M.B.A./1470/FC Appeal allowed.