Judgment :- 1.The Income-tax Appellate Tribunal has sent up its statement of the case and formulated the following question of law under S.256 (1) of the Income-tax Act for our opinion viz: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that S.275 of the Income-tax Act, 1961, as amended by the Taxation Amendment Act of 1970, is applicable to the case and the proceedings are not barred by limitation?" The assessment years with which we are concerned are: 1962-63 to 1967-68 and 1969-70. 2. The Assessee is a registered firm having business in Commission Agency in tea. It challenges the correctness and the propriety of the levy of penalty under S.271 (1) (c) of the Income-tax Act in re-assessment proceedings taken against the firm under S.147 (a) of the Act. The re-assessment orders stated that in the course of investigations into the assessment for the year 1969-70 it was revealed that the Assessee was selling sample tea in the open market and such sale proceeds were not accounted for in the books of the Assessee. The items of expenses shown as having been incurred by the Assessee were also inflated. It was further found that the partners of the Assessee firm had made investments in fixed deposits and in immovable properties out of the income which had escaped assessment. The assessments for the years in question were completed on 31-5-1972 after making some slight additions to the income disclosed. This was after the assessee made a disclosure statement and filed a disclosure petition under S.271(4) to the Commissioner of Income-tax on 2-11-1970. After these proceedings, the Income-tax Officer initiated penalty proceedings and referred the same to the Inspecting Assistant Commissioner. After hearing the Assessee he imposed penalty on 6-3-1975 for all the years in question. The Assessee appealed to the Appellate Tribunal which sustained the penalty. The argument advanced by the Assessee was that the re-assessment orders having been passed on 31-5-1972, the penalty proceedings ought to have been completed within a period of two years, viz. on or before 30-5-1974, and as the proceedings were actually completed only on 6-3-1975, they were barred by limitation. The argument advanced by the Assessee was that the re-assessment orders having been passed on 31-5-1972, the penalty proceedings ought to have been completed within a period of two years, viz. on or before 30-5-1974, and as the proceedings were actually completed only on 6-3-1975, they were barred by limitation. The Tribunal took the view that this must depend upon the question whether the law to be applied was the law in force on the date of the filing the return or the law as on the Ist of April of each year. S.275 of the Act which is the provision for the imposition of penalty and which provided the time-limit, was amended by the Taxation of Laws Amendment Act 42 of 1970 with effect from Ist April 1971, enlarging the period of two years to a period of two months from the end of the financial year in the course of which action for imposition of penalty had been initiated of completed, or six months from end of the month in which the order of the Assistant Commissioner or as the case may be, the Appellate Tribunal is received by the Commissioner of, Income-tax whichever period expires later. The Tribunal noticed that according to the amended provision, the proceedings would not be barred on the date on which the Inspecting Assistant Commissioner passed the relevant orders. For the Assessee the contention was that as the proceedings commenced on 1-4-1971, the amendment would be inapplicable to the case. The Tribunal in its statement of the case, has tabulated the relevant dates as against the assessment orders concerned. For the sake of convenience we may re-produce the tabular statement. Table:#1 3. The question that falls for consideration is covered against the Assessee and in favour of the Revenue by the recent decision of the Division Bench of this Court in M/s. Kerala Oil Mills v. The Commissioner of Incometax (ILR.1978(1) Kerala 665). The Division Bench there noticed that S.275 of the Income-tax Act which provided the time-limit within which proceedings for imposition of penalty had to be completed was amended by the Taxation of Laws Amendment Act 42 of 1970 with effect from 1st April 1971, and that after the amendment the Section permitted penalty proceedings to be completed inter alia within two years of the completion of the assessment order. (This seems to be an obvious mistake in stating the provision of the amended Section). It was held that the scheme of the provisions only confirms the impression that the amendment was procedural in character and therefore retrospective; that S.275 of the Act embodied a rule of limitation and that it governs the proceedings despite the fact that it had come into force only subsequent to the filing of the return. In the course of the judgment the Division Bench noticed the contention of Counsel for the Assessee that S.275 embodied a jurisdictional condition or a fetter on the right or jurisdiction of the Officer and not a period of limitation. This argument was rejected. In Para.3 of the judgment the Division Bench noticed that attention was called to a number of decisions which had considered the question and stated that it was enough to refer to a few of them. It then referred to a few of the decisions. Reference was made to the Supreme Court decisions in S.C. Prashar & Another v. Vasantsen Dwarkadas & Others (48 ITR. I = AIR. 1963 SC. 1356), and to Commissioner of Income-tax Bombay v. Onkarmal Meghraj (1974 (93) ITR.233). Reference was also made to the following decisions viz. Commissioner of Income-tax v. Royal Motor Car Co. (107 ITR 753 Gujarat), Commissioner of Income-tax v. Bhikari Charan Pande (104 ITR. 73 Orissa) ), Income-tax Officer Circle IV. Ward C, Ahmedabad & Another v. Induprasad Devshanker Bhatt (72 ITR. 595 at 600), Kudilal Govindan Seksaria & Others v. Commissioner of Income-tax (Central), Bombay (54 ITR. 653), Continental Commercial Corporation v. Income-tax Officer & Another (1975 (100) ITR. 170), Addl. Commissioner of Income-tax, A.P. v. Watan Mechanical and Turning Works (107 ITR. 743-FB.), Addl. Commissioner of Income-tax, A. P. v. Rajkamal Hotel and Bar (107 ITR. 737), and S.S. Gadgil v. Lal and Co. (53 ITR. 231). It is obvious from the earlier statement which we have noticed, that these did not exhaust the catalogue of decisions cited before the Division Bench. 4. The decision directly concludes the question of law against the Assessee. But Counsel for the Assessee contended before us that the question requires re-examination and the case may be referred to a Full Bench. We think it unnecessary to do so, as we are not satisfied that a case has been made out for re-consideration by a Full Bench. 4. The decision directly concludes the question of law against the Assessee. But Counsel for the Assessee contended before us that the question requires re-examination and the case may be referred to a Full Bench. We think it unnecessary to do so, as we are not satisfied that a case has been made out for re-consideration by a Full Bench. Counsel for the Asssessee cited to us the decision of the Mysore High Court in Guldas Narasappa Thimmiah Oil Mills v. Commercial Tax Officer, Raichur (25 STC. 489), where that court observed that the provisions dealing with imposition of a penalty are substantive in character and not procedural. It would be difficult to demur to a proposition stated in that form. True, the proposition was stated in relation to S.9 (2) of the Central Sales Tax Act, 1956, which embodies a provision having a like effect as S.275 of the Income-tax Act. The decision was affirmed on appeal by the Supreme Court in M/s. Khemka and Co. (Agencies) Private Ltd. v. State of Maharashtra (AIR. 1975 SC. 1549). Chief Justice Ray speaking for the majority stated that penalty is not merely adjunct to assessment and not merely consequential to assessment It is pot merely machinery. Penalty is in addition to tax, and is a liability under the Act. Reference was made to the pronouncement in M/s. Jain Brothers & Others v. The Union of India & Others (AIR. 1970 SC. 778), where penalty proceedings were described as partaking of the character of additional tax. Justice Beg who concurred in a separate judgment made certain observations on which Counsel for the Assessee placed strong reliance. The learned judge observed in Para.37: "37. On a consideration of the provisions mentioned above, it seems to me to be Clear that whatever may be the objects of levying a penalty, its imposition gives rise to a substantive liability which can be viewed either as an additional tax or as a fine for the infringement of the law. The machinery or procedure for its realisation comes into operation after its imposition. In any case it is an imposition of a pecuniary liability which is comparable to a punishment for the commission of an offence. It is a well settled cannon of construction of statutes that neither a pecuniary liability can be imposed nor an offence created by mere implication. In any case it is an imposition of a pecuniary liability which is comparable to a punishment for the commission of an offence. It is a well settled cannon of construction of statutes that neither a pecuniary liability can be imposed nor an offence created by mere implication. It may be debatable whether a particular procedural provision creates a substantive right or liability. But I do not think that the imposition of pecuniary liability, which takes the form of a penalty or fine for a breach of a legal obligation, can be relegated to the region of mere procedure and machinery for the realisation of tax. It is more than that. Such liabilities must be created by clear unambiguous, and express enactment. The language used should leave no serious doubts about its effect so that the persons who are to be subjected to such a liability for the infringement of law are not left in a state of uncertainly as to what their duties or liabilities are. This is an essential requirement of a good government of laws. It is implied in the constitutional mandate found in Art.265 of our Constitution: "No tax shall be levied or collected except by authority of law." The minority view was represented by the judgment delivered by Mathew J. on behalf of himself and Chandrachud J. We do not, with respect, think that the observations relied on by Counsel for the Assessee, deal directly with the position that we have to consider in the instant case, nor with the decisions bearing directly on this aspect of the matter dealt with or considered by the pronouncements of the Supreme Court. We do not therefore think the decision is of any particular assistance to Counsel for the Assessee. 5. Attention was next called to the Supreme Court's pronouncement in S. S. Gadgil v. Lal & Co. (53 ITR. 231). That case had been examined and dealt with by a Division Bench in M/s. Kerala Oil Mills's case (ILR.1978 (1) Kerala 665). Counsel brought to our notice that a different view had been taken in the Andhra High Court in Addl. Commr, of Income-tax, A. P. v. Raj Kamal Hotel & Bar (107 ITR. 737). But the very same High Court by a Full Bench ruling overruled the said decision-vide Addl. Commr, of Income-tax, A. P. v. Waten Mechanical & Turning Works (107 ITR. 743). Commr, of Income-tax, A. P. v. Raj Kamal Hotel & Bar (107 ITR. 737). But the very same High Court by a Full Bench ruling overruled the said decision-vide Addl. Commr, of Income-tax, A. P. v. Waten Mechanical & Turning Works (107 ITR. 743). This was noticed again in our earlier judgment referred to already. Counsel cited a few more decisions generally dealing with the aspect of jurisdiction or jurisdictional condition or specifically taking the view that the provision of the nature involved in these cases is not a procedural section and cannot have retrospective effect. We think it unnecessary to examine these decisions as they do not contain any new or different reasoning other that what was involved and dealt with on the earlier occasion by the earlier Division Bench ruling of this Court. Following the earlier Division Bench ruling in M/s. Kerala Oil Millls, case (ILR.1978 (1) Ker. 665), we answer the question of law referred in the affirmative i.e. in favour of the Revenue and against the Assessee. There will be no order as to costs. A copy of this judgment, under the seal of the Court and the signature of the Registrar, will be communicated to the Appellate Tribunal, as required by law.