T.D. Sugla, J.

1. Two questions of law are raised in this reference at the instance of the assessee. The questions read thus :

" (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Income Tax Officer has a choice to initiate penal proceedings for concealment in respect of the same item of income or particulars of income within the meaning of section 271(1)(c) on the basis of either the original return or the return under section 148

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the penal provisions for default under section 271(1)(c) as amended on April 1, 1968, are applicable in the case of the applicant "

2. The assessee is a company. The proceedings relate to its assessment for the assessment years 1959-60 to 1962-63 (both inclusive). Returns were originally filed and the assessments were completed long before the penal provisions under section 271(1)(c) were amended with effect from April 1, 1968. During the original assessment proceedings, there was no concealment found, no penal proceedings were initiated and naturally no penalty was levied. The assessments were reopened subsequently. In response to the notices issued under section 148, returns of income were filed showing the same income as was shown in the original returns. These returns were filed after April 1, 1968. The assessments were completed after making certain additions. The fact that there was concealment of income is not in dispute. Nor is there any dispute that the assessee is liable to penalty under section 271(1)(c) of the Income Tax Act. The dispute is only whether the penalty is to be imposed in accordance with the provisions of section 271(1)(c) as they stood before or after April 1, 1968.

3. On a reference by the Income Tax Officer, the Inspecting Assistant Commissioner had levied penalties of Rs. 70,000, Rs. 1,30,000, Rs. 70,000 and Rs. 60,000 for the respective assessment years under section 274(2) read with section 271(1)(c) of the Income Tax Act, 1961, as it stood after its amendment with effect from April 1, 1968. Having regard to the extent of concealment of income eventually sustained, the Tribunal reduced the penalties respectively to Rs. 15,500, Rs. 7,500, Rs. 16,000 and Rs. 7,500.

4. There was, it appears, some discussion as to whether the penalty was impassable under section 271(1)(c) as it was in force at the time of filing the returns of income originally or the law in force after its amendment with effect from April 1, 1968, as the returns of income in response to the notice under section 148 were filed after April 1, 1968. According to the assessee, the penalties were to be under the provisions as they existed prior to April 1, 1968, whereas, according to the Department, it was the law that obtained on and from April 1, 1968, that would govern the imposition of penalty. But the Tribunal, at that stage, did not consider it necessary to decide the issue inasmuch as, in its view, the quantum of penalty sustained by it was higher than the minimum and lower than the maximum on either basis.

5. Subsequent thereto, both the assessee and the Department filed miscellaneous applications. It was stated that there was a mistake in the data furnished to the Tribunal during the appellate proceedings and that if the correct data were taken into account, it would be found that the ad hoc penalties maintained by the Tribunal were lower than the minimum for some years and higher than the maximum in the remaining years. The Tribunal, in the circumstances, considered it appropriate to examine the issue, namely, whether the penalty was to be imposed under the provisions of section 271(1)(c) before amendment with effect from April 1, 1968, or under the provisions as they stood after its amendment with effect from April 1, 1968. The Tribunal noted that the assessee had furnished returns of income in response to the notices issued under section 148 after April 1, 1968, and that in those returns also the assessee had not shown the correct income. The Tribunal held that the penal provisions of section 271(1)(c), as amended with effect from April 1, 1968, were applicable and, therefore, no modification was required as regards the quantum of penalties.

6. Both the questions of law thus arise out of the Tribunals order in the miscellaneous applications filed by the assessee and the Department. It is submitted by Shri Munim, learned counsel for the assessee, that the basic obligation of the assessee is only one, namely, to file a proper and correct return. It is only appropriate that the offence should be correlated to the point of time when the first return is filed in which concealment took place and any subsequent returns should be left out of consideration. Therefore, it is the law on the date of the filing of the first return that should govern the imposition of penalty. In support, Shri Munim placed reliance on the Supreme Court decision in the case of Brij Mohan v. CIT : [1979]120ITR1(SC) and the Delhi High Court decision in the case of Addl. CIT v. Joginder Singh : [1985]151ITR93(Delhi) .

7. Shri Jetley, learned counsel for the Department, on the other hand, relied upon the Madhya Pradesh High Court decision in Addl. CIT v. Balwantsingh Sulakhanmal : [1981]127ITR597(MP) where a contrary view was taken.

8. There is no dispute that, in the case before us, the returns originally filed as well as the returns filed in response to the notices issued under section 148 were not correct returns inasmuch as the income subsequently found as concealed income was shown in none of them. There is also no dispute that while the original returns were filed and even the assessments were completed originally before April 1, 1968, the subsequent returns in response to the notices under section 148 were filed after April 1, 1968, and the assessments were completed long thereafter. Therefore, the question that requires consideration is whether the penal provisions of section 271(1)(c), as amended with effect from April 1, 1968, are applicable or whether the penal provisions as they stood before amendment with effect from April 1, 1968, are applicable. In other words whether, for the purpose of consideration of imposition of penalty under section 271(1)(c), the date of concealment is to be taken as the date on which the returns were filed originally or the date on which the returns were filed in response to the notices issued under section 148, there being no dispute that income was concealed in the returns filed originally as well as in the returns filed subsequently.

9. In view of the Supreme Court decision in Brij Mohans case : [1979]120ITR1(SC) , there cannot possibly be any dispute that, for imposition of penalty under section 271(1)(c), the law obtaining as on the date of filing the return in which income was found to have been concealed, is applicable. As, in this case, income was concealed both in the returns originally filed and in the return filed subsequently, the crucial question still remains which of the dates, i.e., the dates when the returns were filed originally when returns were subsequently filed are the material dates for the purpose.

10. Admittedly, the provision to be applied is as it stands on the date when default which attracts penalty is committed. The returns filed originally, there is no dispute, were first in point of time, were incorrect and involved concealment of income. From this point of view, the provisions of section 271(1)(c) as they stood on he dates when such returns were filed were certainly attracted. It may be that the provisions of section 271(1)(c) as they stood on the dates when incorrect returns involving concealment of income were subsequently filed are also attracted. However, when the assessee has already committed a default as regards concealment of income and a particular provision of law is applicable to him, it is difficult to hold that by repeating the same default in filing incorrect returns in response to the notices under section 148 subsequently, he becomes liable to penalty under a provision of law different from the one that obtained on the date when he had first committed that default. Both the Delhi and Madhya Pradesh High Courts, in the judgments respectively relied upon by Shri Munim for the assessee and Shri Jetley for the Revenue, have considered this very question. The Delhi High Court has analyzed the relevant provisions in great detail and discussed all available case law. With respect to the decision of the Madhya Pradesh High Court, the Delhi High Courts view has commended itself to us. Accordingly, we hold that penalty is impassable in this case under section 271(1)(c) as it stood on the dates when the returns were filed originally, i.e., as the provisions stood before amendment with effect from April 1, 1968.

11. In the result, we answer both the questions in the negative and in favour of the assessee.

12. No order as to costs.