G.C. Bharuka, J.
1. In the present reference application we have been called upon to answer the following question :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the penalty of Rs. 23,907 imposed under Section 271(1)(c) of the Income-tax Act, 1961 ?'
2. The proceedings relate to the assessment year 1953-54. The assessee has filed its original return disclosing total income at Rs. 24,343. Later on, pursuant to search and seizure made in the premises of the assessee on December 16, 1966, reassessment proceedings were initiated and a notice under Section 148 of the Income-tax Act, 1961 (hereinafter the 'new Act' only), was issued on January 4, 1969. The assessee filed its return showing the same income as returned earlier. In the assessment proceedings, an addition of Rs. 25,907 was sustained up to the Tribunal as income from undisclosed sources based on unexplained cash credits. Because of those additions, penalty proceedings under Section 271(1)(c) were initiated and Rs. 23,907 was imposed as penalty for concealment of income by the Inspecting Assistant Commissioner. On appeal, the Tribunal set aside the said order of penalty by taking the view that merely because the assessee's explanation was rejected or because sufficient evidence had not been produced to prove the claim of the assessee that the amount in question did not represent the income of this year, it could not be said that the Department had discharged its onus of proving that the amount in question represented the assessee's concealed income. The Tribunal also held that no cogent material has been brought on the record by the Department to establish beyond doubt that the amount in question did represent the assessee's income which was assessable in the assessment year 1953-54.
3. Sri K.K. Vidyarthi, learned counsel appearing for the Department, has submitted that since the impugned penalty proceeding has been initiated in 1969, keeping in view the Explanation to Section 271(1)(c) read with Section 297(2)(g) of the new Act, the onus was on the assessee to rebut the presumption of concealment in relation to the additions. In support of his submission, he has placed reliance on the Supreme Court decision in the case of CIT v. Mussadilal Ram Bharose : [1987]165ITR14(SC) . By reference to the case of CIT v. Parmanand Advani : [1979]119ITR464(Patna) , it was further submitted that the Explanation to Section 271(1)(c) is merely procedural and, therefore, even if the substantive part is not held to be applicable, at least the Explanation will apply since the procedural provisions, unless otherwise indicated, are necessarily retrospective in their application.
4. Mr. Rameshwar Prasad No. II, learned counsel appearing for the assessee, strenuously submitted that in view of the recent judgment of the Supreme Court in the case of CIT v. Onkar Saran and Sons : [1992]195ITR1(SC) , the question has to be necessarily answered against the Department because now, the apex court has conclusively resolved the controversy by holding that even in a case where a return filed in response to a notice under Section 148 of the Act involved an element of concealment, the law applicable would be the law as it stood at the time when the original return was filed for the assessment year in question and not the law as it stood on the date on which the return was filed in response to the notice under Section 148. In substance, his submission is that in view of the pronouncement of the Supreme Court, the case of the assessee has to be governed by the provisions contained in Section 28(1)(c) of the Indian Income-tax Act, 1922 (hereinafter in short 'the old Act' only), and not by those contained under Section 271(1)(c) of the new Act.
5. The provisions contained in Section 28(1)(c) of the old Act and Sections 271(1)(c) and 297(2)(g) of the new Act, to the extent those are relevant for the present case, may be quoted hereunder :
'Section 28(1)(c) (old Act).--Penalty for concealment of income or improper distribution of profits.--(1) If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, in the course of any proceedings under this Act, is satisfied that any person--. . .
(c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income,
he or it may direct that such person shall pay by way of penalty .... and in the cases referred to in Clauses (b) and (c), in addition to any tax payable by him, a sum not exceeding one and a half times the amount of the income-tax and super-tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income :. . .
Section 271. Failure to furnish returns, comply with notices, concealment of income, etc.--(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.
Explanation.--Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under Section 143 or Section 144 or Section 147 (reduced by the expenditure incurred bona fide by him for the purposes of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of Clause (c) of this sub-section.
Section 297. Repeals and savings.--(1) The Indian Income-tax Act, 1922 (11 of 1922), is hereby repealed.
(2) Notwithstanding the repeal of the Indian Income-tax Act,
1922 (11 of 1922) (hereinafter referred to as 'the repealed Act'),-. . .
(g) any proceeding for the imposition of a penalty in respect
of any assessment for the year ending on the 31st day of March, 1962, or any earlier year, which is completed on or after the 1st day of April, 1962, may be initiated and any such penalty may be imposed under this Act ?'
6. Now, proceeding to examine the submissions made at the Bar, in view of the Supreme Court judgment in the case of CIT v. Anwar Ali : [1970]76ITR696(SC) , it has to be taken as the settled law that if in the facts of the present case Section 28(1)(c) of the old Act is taken to be applicable, then the view taken by the Tribunal has to be held as correct. But if it is not so, then CIT v. Mussadilal Ram Bharose : [1987]165ITR14(SC) will govern the answer to the question. Therefore, the moot question is whether, in the present case, the penal provisions as contained under the old Act will apply or those contained under the new Act will apply. Mr. Rameshwar Prasad No. II is partially right in submitting that the ultimate question, as posed above, has been answered to a good extent by the Supreme Court in the case of CIT v. Onkar Saran and Sons : [1992]195ITR1(SC) , wherein their Lordships have affirmed the view taken by the majority of the High Courts holding that even in a case where a return filed in response to a notice under Section 148 involved an element of concealment, the law applicable for imposition of penalty will be the law as enforced at the time of filing of the original return for the assessment year in question and not the law as it stands on the date on which the return in response to notice under Section 148 is filed. No doubt, in this case, the Supreme Court was dealing only in relation to the measure of penalty but the law declared has to be taken as applicable to the penal provision taken as a whole. Apart from all other reasons, in my opinion, keeping in view the settled principles of interpretation of statutes, no second view is possible. Neither anything convincing could be submitted at the Bar nor I could find for myself to take the view that in a case like the present one, though the measure of penalty has to be governed by the provisions of the old Act, the law relating to onus should be culled out from the new Act. In my opinion, the Explanation added to Section 271(1)(c) of the new Act is an integral part of this section and the provisions contained under the said section can either be made applicable as a whole to a given set of facts or not at all.
7. So far as the decision of this court in the case of CIT v. Parmanand Advani : [1979]119ITR464(Patna) is concerned, it cannot be said to have a bearing on the question involved in this case because in that case the penalty proceedings related to the assessment year 1963-64 and the original return as well as that pursuant to the notice under Section 148 were both filed under the provisions of the new Act. Therefore, for the concealment of income, the provisions of Section 271(1)(c) were clearly attracted. The controversy was as to whether the Explanation to the said section which was added with effect from April 1, 1964, was at all applicable since the original return was filed prior to April 1, 1964, though the second return pursuant to reassessment proceedings had been filed subsequent to the said date. Therefore, in the said case, admittedly, Section 271(1)(c) of the new Act was applicable. Apart from this distinguishing feature which is quite material in nature, in view of the broad language used by the Supreme Court in the case of CIT v. Onkar Saran and Sons : [1992]195ITR1(SC) , the judgment of this court in the aforesaid case cannot be said to hold the field in the facts of the present case.
8. So far as the submission of Mr. Vidyarthi based on Section 297(2)(g) of the Act is concerned, in my opinion, even if it be accepted that it has relevance to the point at issue and has not been taken note of by the apex court, still it is not permissible for this court to traverse beyond the dictum as laid down in CIT v. Onkar Saran and Sons : [1992]195ITR1(SC) , in view of Article 141 of the Constitution of India because what binds is the law declared and not the reasons therefor. In Ballabhadas Mathuradas Lahhani v. Municipal Committee : AIR1970SC1002 , it has been held that the High Courts cannot ignore the decision of the Supreme Court because they think that 'relevant provisions were not brought to the notice of the court'. Apart from this, Section 297(2)(g) has its relevance in relation to the provisions contained in Section 274 which is essentially procedural in nature.
9. For the reasons noticed above, in my opinion, the Tribunal was justified in law in deleting the penalty in question. The question is thus answered in favour of the assessee. There will be no order as to costs.
10. Let a copy of this order be sent to the Income-tax Appellate Tribunal, Patna Bench.
Aftab Alam, J.
11. I agree.