Commissioner Of Wealth Tax v. Ramdeo Sachdeo — 1985 DIGILAW 109 (PAT)

Judgment Nazir Ahmad, J. 1. A statement of the case has been submitted by the Income-tax Appellate Tribunal, Patna Bench A, Patna, under Sec.27(1) of the Wealth-tax Act, 1957 (hereinafter to be called as "the Act"), referring the following question of law for the opinion of this court at the instance of the Department : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in applying the provisions of the proviso to Sec.14 of the Wealth-tax Act and in holding that the default under Sec.18(1)(a) of the Wealth-tax Act was for a period of four months only ?" The relevant facts of the case can be culled from the statement of the case. The assessee is an individual. For the assessment year 1969-70, the return of wealth was filed by the assessee on February 23, 1970. The Wealth-tax Officer found that the return was due on June 30, 1969, and so he held that there was a delay of seven months in filing the return. For this delay he started penalty proceedings under Sec.18(1)(a) of the Act. Alter considering the contentions of the assessee, the Wealth-tax Officer passed an order on October 28, 1970, imposing a penalty of Rs. 15,395. A copy of the order of the Wealth-tax Officer has been annexed and marked as annexure A forming part of the statement of the case. 2. On appeal before the Appellate Assistant Commissioner it was urged that the assessee had a share in a firm and his interest in the firm was his main wealth and that the firms accounting year ended on March 31, 1969. The firm took some time in finalising its accounts and under the Income-tax Act the firm did not file its return before September 30, 1969, The return of the firm, in fact, was filed in January 1970, and it was only then that the assessee was able to find out the value of his interest in the partnership firm. On these facts, the Appellate Assistant Commissioner held that the assessee had a reasonable cause for not filing the return within the specified time. He, therefore, cancelled the order of the Wealth-tax Officer. A copy of the order of the Appellate Assistant Commissioner has been annexed and marked as annexure B forming part of the statement of the case. 3. On these facts, the Appellate Assistant Commissioner held that the assessee had a reasonable cause for not filing the return within the specified time. He, therefore, cancelled the order of the Wealth-tax Officer. A copy of the order of the Appellate Assistant Commissioner has been annexed and marked as annexure B forming part of the statement of the case. 3. The Department appealed to the Appellate Tribunal and it was pleaded on behalf of the Department that the delay was not due to any reasonable cause and that the default was a deliberate one. The Tribunal upheld the contention of the Department that it was a fit case for imposition of penalty. The Tribunal, however, held that in view of the proviso to Sec.14 of the Wealth-tax Act, the return of wealth could be filed before the expiry of the time for furnishing the return of income of the business from which the assessee derived income. According to the Tribunal, the due date for the firm to file its return of income was September 30, 1969, and, therefore, by virtue of the proviso to Sec.14 of the Act, the assessee could have filed his return of wealth by September 30, 1969. In this view of the matter, the Tribunal held that the .delay was only for a period of four months. The Tribunal, therefore, directed that penalty be levied on the basis that there was a default for four months only. A copy of the order of the Tribunal has been annexed and marked as annexure C forming part of the statement of the case. 4. On these facts, the above question has been referred to this court for its opinion. 5. Mr. B. P. Rajgarhia for the Revenue-petitioner has referred to the order of the Appellate Tribunal, annexure C in paragraph 6 where the Tribunal has held that the assessee was one of only two partners controlling the firm and there is nothing on the record to suggest that the assessee was merely a dormant partner and that the duty of finalising the accounts of the firm and filing its return of income within time was the exclusive duty of the other partner. The Tribunal also held that the firm is not something separate from the two partners who constituted it for the purpose of fixing the responsibility for failure to discharge the statutory duties and that the responsibility of filing the return of income of the firm was also on the assessee and that having failed to discharge that responsibility, the assessee could not escape the consequences which inevitably flowed from that failure. The Tribunal also held that the conduct of the assessee in totally disregarding the statutory provisions amounts to culpable negligence and is contumacious. Thus, the Appellate Tribunal held that there was no reasonable cause for delay. The Tribunal, in view of the proviso to Sec.14 of the Act held that the assessee could file his wealth-tax return by September 30, 1969, and so the Tribunal calculated penalty for four months from September 30, 1969 to February 23, 1970. 6. Thus, in this case, we have only to consider whether the proviso to Section 14(1) of the Act will be applicable. Sec.14 of the Act lays down that every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date was of such an amount as to render him liable to wealth-tax under this Act, shall, before the 30th day of June of the corresponding assessment year, furnish to the Wealth-tax Officer a return in the prescribed form and verified in the prescribed manner setting forth the net wealth as on that valuation date. The proviso to Section 14(1) of the Act lays down in the case of a person whose net wealth or the net wealth of any other person in resepct of which he is assessable under this Act includes the value of any assets held in a business or profession and the time (whether fixed originally or on extension) for furnishing the return of his total income or, as the case may be, of the total income of the other person aforesaid for the said assessment year under Sub-section (1) or Sub-section (2) or Sub-section (3) of Sec.139 of the Income-tax Act, expires on or after the 30th day of June aforesaid, the return in respect of such net wealth for the assessment year may be furnished before the expiry of the time for furnishing such return of income. 7. 7. Thus, according to the proviso, if the income-tax return could be filed by September 30, 1969, then the penalty for default can be only for four months, otherwise penalty for default will be for seven months. In the present case, admittedly, the income-tax return could be filed by September 30, 1969, and so if the proviso to Sec.14(1) of the Act is applicable, then the Tribunal was justified in holding that the penalty can be levied only for the period of four months after September 30, 1969, which was admittedly the due date for filing the income-tax return and so the assessee could have filed wealth-tax return also by September 30, 1969. 8. It appears that the present proviso to Sec.14(1) of the Act as mentioned above was inserted by Sec.26 of the Finance Act, 1970, with effect from April 1, 1970. On this basis Mr. B. P. Rajgarhia for the Revenue-petitioner has submitted that the proviso to Sec.14(1) of the Act is substantive and it cannot apply to the return filed by the assessee on February 23, 1970. He has also submitted that the date for filing wealth-tax return was June 30, 1969, as found in annexure A as well as in annexure C and also in the statement of the case. He has also submitted that the law will be applicable as on the due date of the return and on the due date of the return, the proviso in the present form was not in existence and so the penalty should be imposed for default for a period of seven months as held by the Wealth-tax Officer. 9. On the other hand, Mr. Pawan Kumar for the assessee-opposite party had submitted that the proviso has only extended the period of limitation and so the proviso is procedural and it will apply to all pending cases and so it will apply in the case of wealth-tax for the assessment year 1969-70. The Wealth-tax Officer has pointed out in the penalty order that the due date for filing the return was June 30, 1969. Mr. B. P. Rajgarhia has submitted that the law applicable in this case will be the law as on June 30, 1969, and the proviso to Sec.14(1) of the Act will not be applicable in this case. 10. The Wealth-tax Officer has pointed out in the penalty order that the due date for filing the return was June 30, 1969. Mr. B. P. Rajgarhia has submitted that the law applicable in this case will be the law as on June 30, 1969, and the proviso to Sec.14(1) of the Act will not be applicable in this case. 10. In order to appreciate the contentions of both the parties it is necessary to refer to the Finance Act, 1970. The present proviso to Sec.14(1) of the Act was introduced by Sec.26(d) of the Finance Act, 1970. This Finance Act in Sub-section (2) of Sec.1 lays down that Sections 2 to 27 (both inclusive) shall be deemed to have come into force on the 1st day of April, 1970. This Finance Act is to be found at pages 121 to 158 in [1970] 76 ITR (Statutes). Thus it cannot be doubted that the proviso to Sec.14(1) of the Act has come into force from the 1st day of April, 1970. 11. We have to bear in mind that the wealth-tax return was due on June 30, 1969, and it was filed on February 23, 1970, long before the proviso to Sec.14(1) of the Act was inserted from April 1, 1970. Now the question is whether in such a case the proviso to Sec.14(1) will be applicable. 12. It has been held in the case of Hajee K. Assainar V/s. CIT [ 1971 ] 81 ITR 423 (Ker) that if the amendment of a statute deals merely with matters of procedure and does not affect the rights of the parties, the new procedure will, prima facie, apply to all pending proceedings as well as future actions. It has also been held in this decision that where rights and procedure are dealt with together, the intention of the legislature where the procedural amendment is closely and inextricably linked with the change simultaneously introduced in another part of the statute dealing with substantive rights and liabilities, may well be that the old rights are to be determined by the old procedure and that only the new rights under the amended provisions are to be dealt with by the new procedure. 13. It has been held in the case of CIT V/s. P. M. Bagchi and Co. 13. It has been held in the case of CIT V/s. P. M. Bagchi and Co. [ 1951 ] 20 ITR 33 (Cal) that Sec.23(5)(a) which was introduced in the Indian Income-tax Act, 1922, by the Indian Income-tax (Amendment) Act, (VII of 1939), is purely procedural and merely affects the machinery for collecting the tax rather than tax itself and this is a more convenient method of collecting the amount which Government obtained in rather more complicated circumstances before 1939 and consequently the section should be given retrospective effect and should be applied in the assessment of the income for the assessment year 1938-39 if the assessment was made after the Amendment Act came into force, i.e., after 1st April, 1939. In this case, there is an observation at page 37 that it has been laid down time and again by their Lordships of the Privy Council and by courts in this country that a statute will not affect rights which had accrued before a statute came into force unless there are express words in the statute affecting such rights or where a retrospective effect to the statute is inevitable by necessary intendment or implication. 14. It has been held in the case of Kudilal Govindram Seksaria V/s. CIT [1964] 54 ITR 653 (Bom) that Sec.22(4) of the Indian Income-tax Act, 1922 (hereinafter referred to as "the 1922 Act"), was a machinery section and purely procedural ; and that the effect of making the amended Sec.22(4) retrospective from April 1, 1952, was that notices issued under that section would be good and in order if they were issued after April 1, 1952, even though the notices called for production of particulars and information besides accounts and documents and that its application was not restricted to assessments of periods subsequent to April 1, 1952. It appears that Sec.22(4) before amendment empowered the Income-tax Officer only to require the production of accounts and documents. That section was amended by the Amending Act of 1953 with retrospective effect from April 1, 1952, and the amendment gave power to the Income-tax Officer to require the assessee to furnish particulars and information in addition to producing accounts and documents and in those circumstances this observation was made. That section was amended by the Amending Act of 1953 with retrospective effect from April 1, 1952, and the amendment gave power to the Income-tax Officer to require the assessee to furnish particulars and information in addition to producing accounts and documents and in those circumstances this observation was made. Their Lordships of the Bombay High Court at page 660 have pointed out that the liability to pay the tax is founded on Sections 3 and 4 of the Income-tax Act, which are the charging sections and Sec.22, etc., are the machinery sections to determine the amount of tax. It has also been held in this decision that the provision of Sec.22(4) of the 1922 Act by itself is purely procedural and simply because there has been a change in this procedural provision, which perhaps is a little more inconvenient to the assessee, that would not make the usual rule inapplicable to this provision, viz., that a procedural provision will have application to all pending proceedings subsequent to its introduction. Their Lordships have also held at page 662 that the correct position is that the reference to April 1, 1952, is to regulate all notices which had asked for particulars and information in addition to accounts and documents subsequent to that date even though at the time when the said notices were given, the amended part of the said section was not on the statute book. 15. In the case of ITO V/s. T.S. Devinatha Nadar [1968] 68 ITR 252 (SC), the assessment of a registered firm for the assessment year 1943-44 was completed on January 22, 1946, and the share income of each partner was determined at Rs. 8,265 and the assessments of the individual partners were completed on January 24, 1946. Thereafter, on re-assessment of the firm made under Sec.34 of the 1922 Act on May 30, 1959, a sum of Rs. 90,000 was added to the income of the firm. On July 24, 1959, notices under Sec.35(5) were issued for rectification of the partners assessments on the basis of the re-assessment of the firm and orders of rectification were made. Thereafter, on re-assessment of the firm made under Sec.34 of the 1922 Act on May 30, 1959, a sum of Rs. 90,000 was added to the income of the firm. On July 24, 1959, notices under Sec.35(5) were issued for rectification of the partners assessments on the basis of the re-assessment of the firm and orders of rectification were made. In such circumstances, it was held by a majority in the Supreme Court that since the reassessment of the firm was made after Sec.35(5) came into force, Sec.35(5) applied and the assessments of the partners could be rectified under that section even though those assessments were made before April 1, 1952, and the orders of rectification under Sec.35(5) were validly made. It was held by the majority that there is nothing in Sec.35(5) of the 1922 Act to show that the "completed assessment" of a partner in a firm must take place after April 1, 1952, viz., the date on which the provision was brought on the statute book in order that the power of rectification thereunder could be exercised and that what is to take place after the section came into force to give rise to the power of rectification is the finding on the assessment or re-assessment of the firm. In this case, Sec.35(5) was brought on the statute book by the Income-tax (Amendment) Act, 1953, with effect from the 1st day of April, 1952. In this case, a reference was made to "Halsbury" to the effect that the general rule is that all statutes, other than those which are merely declaratory, or which relate only to matters of procedure or evidence, are prima facie prospective; and retrospective effect is not to be given to them unless, by express words or, necessary implication, it appears that this was the intention of the legislature. A reference was made to the observations of Lord Hatherley L.C. in Pardo V/s. Bingham [ 1869] 4 Ch. Appl. 735, 740 where on the question as to whether a statute operated retrospectively it was stated that we must look to the general scope and purview of the statute, and at the remedy sought to be applied, and consider what was the former state of law, and what it was that the legislature contemplated and hence the observations were made. 16. However, as regards the question of limitation, there are various decisions. As Mr. 16. However, as regards the question of limitation, there are various decisions. As Mr. Pawan Kumar has argued that the proviso lays down only a rule of limitation, let us see how the proviso will be applicable in the present case. He has drawn his analogy from the provisions of Sec.275 of the Income-tax Act. Sec.275 of the Income-tax Act, 1961 (hereinafter to be called as the 1961 Act), originally stood as follows :- - "275. Bar of limitation for imposing penalty.--No order imposing a penalty under this Chapter shall be passed after the expiration of two years from the date of the completion of the proceedings in the course of which the proceedings for the imposition of penalty have been commenced." This portion was substituted by the Taxation Laws (Amendment) Act, 1970, with effect from 1st April, 1971, and the present Sec.275 lays down as follows :- - "275. Bar of limitation for imposing penalties.--No order imposing a penalty under this Chapter shall be passed- (a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the Appellate Assistant Commissioner under Sec.246 or an appeal to the Appellate Tribunal under Sub-section (2) of Sec.253, after the expiration of a period of- (i) two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or (ii) six months from the end of the month in which the order of the Appellate Assistant Commissioner or, as the case may be, the Appellate Tribunal is received by the Commissioner, whichever period expires later; (b) in any other case, after the expiration of two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed." Thus, it cannot be doubted that the amended provision extends the period of limitation. It was held in the case of CIT V/s. Shikari Charan Panda [ 1976] 104 ITR 73 by the Orissa High Court, while considering Sec.275 of the 1961 Act, that when the amending Act came into force, the two-year period provided under the unamended Sec.275 had not expired and at that stage the new provision with effect from April 1, 1971, introduced a new scheme of limitation and that no right had accrued to the assessee when the law was changed and, therefore, the law as in force on the date when the order was made must be applicable and the Tribunal was not justified in setting aside the order levying penalty as barred by limitation. In this case, the assessment on the assessee was framed on December 31, 1970, and the penalty proceeding was initiated on the same day and penalty was imposed by order dated February 20, 1973. This order levying penalty would not have been barred by limitation under Sec.275 of the 1961 Act as it stood before amendment by the Taxation Laws (Amendment) Act, 1970 [ 1971 ] 79 ITR (Statutes) 1 to 28 which came into force from April 1, 1971, but would not be barred if the amended section was applicable. Thus, the Orissa High Court held that if limitation had not expired and at that time the period of limitation was extended by the amending Act, then the amending Act extending the limitation will apply. 17 The Orissa High Court again held the same view in the case of CIT V/s. Soubhagya Manjari Devi [ 1976] 105 ITR 82 where again it was repeated that when the amending Act came into force, i.e., from April 1, 1971, the two-year period provided under Sec.275 of the unamended Act had not expired and at that stage the new provision with effect from 1st April, 1971, introduced a new scheme of limitation and that no right had accrued to the assessee when the law was changed and, therefore, the law as in force on the date when the order was made must be applicable. 18. 18. It has been held in the case of Addl CIT V/s. Watan Mechanical and Turning Works [1977] 107 ITR 743, by a Full Bench of the Andhra Pradesh High Court that no one has a vested and substantive right in the procedure and limitation has to be considered as a part of the procedural law as distinct from substantive law. It has also been held that the liability for tax or penalty would always remain on the assessee; but if the time prescribed under the Act expires, the liability cannot be imposed by the authorities, the reason being that the assessee should not be subjected to unending hardship. It has also been held in this decision that before the limitation prescribed expires, if the same is enlarged the limitation being a procedural one, the extended period of limitation will apply to such proceedings. It has also been held in this decision that in the instant case, under the old Sec.275 as it stood before Amendment Act, 1970, the limitation for levying penalty was due to expire on February 25, 1972, and as Sec.275 of the 1961 Act was amended with effect from April 1, 1971, enlarging limitation, the amended section governs the case under which the inpugned orders levying penalty would be in time as they were made before March 31, 1972. At page 752 their Lordships have relied on the observations of the Gujarat High Court in CIT V/s. Royal Motor Car Co. [1977] 107 ITR 753 which is an appendix for the purpose, that it is well-settled law that as regards matters of procedure, the legislature can make changes and those changes would apply, so far as the limitation is concerned, to pending proceedings unless a vested right has accrued to any party by reason of the old period of limitation having expired. Thus, the Full Bench has laid down that if the period of limitation has already expired, then the amending Act extending the period of limitation will not apply retrospectively but if the period of limitation has not expired, then the amending Act extending the period of limitation will have retrospective effect. 19. Thus, the Full Bench has laid down that if the period of limitation has already expired, then the amending Act extending the period of limitation will not apply retrospectively but if the period of limitation has not expired, then the amending Act extending the period of limitation will have retrospective effect. 19. It has also been observed in the case of Kerala Oil Mills V/s. CIT [1980] 121 ITR 254 by the Kerala High Court at page 257 that it is a well-settled principle that no action can be commenced where the period during which it can be commenced has expired. This decision also holds that if the period of limitation had not expired and the limitation period was extended, then the extended period will apply. Their Lordships of the Kerala High Court have also mentioned at page 259 that the various decisions they have considered only give expression to the well-known principle that even a procedural section cannot be given retrospective operation so as to revive a cause of action that had already become barred, but this principle has no application to Sec.275 in view of the fact that the amendment with effect from April 1, 1971, has extended the period of limitation which had not yet expired. 20. The Kerala High Court followed its earlier decision in the case of Saraf Trading Corporation V/s. CIT [1980] 123 ITR 159. 21. The principle laid down in Kerala Oil Mills V/s. CIT [1980] 121 ITR 254 (Ker) was also followed in the case of CIT V/s. Sadhu Ram [ 1981 ] 127 ITR 517 by the Punjab and Haryana High Court. 22. From the various decisions cited above, it is evident that the law of limitation being a procedural law has always retrospective effect unless the amending statute provides otherwise. The decisions also lay down that if the period of limitation had already expired, then any amendment relating to limitation will not be applicable in such cases and that if by amendment the limitation period is extended when it has not expired, then such an Amending Act will have a retrospective operation of being procedural law. 23. Bearing the aforesaid decisions in mind, it has to be considered as to what will be the position in the present case. 23. Bearing the aforesaid decisions in mind, it has to be considered as to what will be the position in the present case. I have already pointed out above that the due date for filing the wealth-tax return was June 30, 1969, and the return was filed on February 23, 1970. The proviso to Sec.14(1) of the Act came into force from April 1, 1970. Thus, in this case, not only the due date for filing the return had expired but also the return had been filed before the proviso was inserted with effect from April 1, 1970. 24. Now, there are various decisions to show that the default in not filing the return on the due date occurs when the return is not filed on the due date and the law applicable is the law in force on the due date for filing of the return. Sec.18(1)(a) of the Act lays down that if the Wealth-tax Officer, Appellate Assistant Commissioner, Commissioner (Appeals), Commissioner or Appellate Tribunal in the course of any proceedings under this Act is satisfied that any person has without reasonable cause failed to furnish the return which he was required to furnish under Sub-section (1) of Sec.14, then he or it may order the imposition of penalty. Under Sec.139(1) of the 1961 Act, a return of income has to be filed by a fixed date. Under Sec.271(1)(a) of the 1961 Act, if the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under the Act is satisfied that any person has without reasonable cause failed to furnish the return of total income which he was required to furnish under Sub-section (1) of Sec.139, then he may direct imposition of penalty. These provisions have been considered in various decisions. 25. In the case of CGT V/s. C. Muthukumaraswamy Mudaliar [1975] 98 ITR 540, it has been held by the Madras High Court that where the infringement is said to be the failure to furnish the return in time, the offence is complete when the return is not filed on the due date and in such cases, the offence having taken place on the date fixed for furnishing return, the law as on that date has to govern the levy of penalty. 26. 26. It has been held in the case of CWT V/s. Ram Narain Agrawal [1977] 106 ITR 965 by the Allahabad High Court that the penalty proceedings are quasi-criminal in nature and as such, it is imperative that they should be construed strictly and that the law operative on the day when the infringement takes place is the law applicable unless it is made applicable ex post facto. It has also been held in this decision that the default in cases of non-filing of returns takes place after the expiry of time or notice and that it had already taken place in this case before the amendment of Sec.18(1)(a) of the Act and that once the law was applicable, it shall apply to the entire period. 27. It has been held in the case of Suresh Seth V/s. CWT [1977] 108 ITR 86 by the Punjab and Haryana High Court that a fiscal statute cannot be construed retrospectively unless there are clear words to that effect in the statute itself and that Sec.18(1)(a) of the Act, as amended by the Finance Act, 1969, is not retrospective in its operation and that under Sec.18 of the Act, the wrongful act on the part of an assessee becomes complete as soon as he does not file the return of his wealth on the stipulated date and that his omission to do so does not make the wrongful act a continuing one merely because penalty on him may either continue or get enhanced and that penalty can be imposed on an assessee for failure to file a return on the due date only on the basis of the law which was prevalent on that date. 28. 28. It has been held in the case of CWT V/s. R. D. Chand [1977] 108 ITR 787 by the Andhra Pradesh High Court that the default under Sec.18(1)(a) of the Act must be deemed to have been committed by the assessee on the due date on which he was required to file return for the relevant assessment year and will be visited with that penalty under the provisions of the Act as it stood on the said crucial date and that Sec.14(1) of the Act casts an obligation on every assessee to file his return by the 30th June of the assessment year and any assessee who fails to file the return by the 30th June of the relevant assessment year commits default under Sec.18(1)(a) of the Act and that under section 14(1) as read with Sec.18(1)(a) of the Act, it cannot be said that the default under Sec.18(1)(a) of the Act amounts to the commission of a fresh default every month thereafter and hence the default committed under this section is a completed default and not a continuing one. 29. It has been held in the case of CWT V/s. P. C. M. Sundarapandian [1978] 114 ITR 367 by the Madras High Court that the law applicable to levy of penalty under Sec.18(1)(a) of the Act is the law in force on the date of the commission of the default and the law as on the date of default would govern the levy of penalty for the entire period of default. Similar view has been held by the Karnataka High Court in the case of CWT V/s. C. S. Manvi [1978] 114 ITR 417. Similar view has been held by the Allahabad High Court in the case of CWT V/s. Chunni Lal Anand [ 1979] 116 ITR 355. Similar view has been taken by the Madhya Pradesh High Court in the case of Addl. CWT V/s. Smt. Manjuladevi Muchhal [1979] 119 ITR 43. 30. Similar view has been held by the Allahabad High Court in the case of CWT V/s. Chunni Lal Anand [ 1979] 116 ITR 355. Similar view has been taken by the Madhya Pradesh High Court in the case of Addl. CWT V/s. Smt. Manjuladevi Muchhal [1979] 119 ITR 43. 30. It has been held in the case of Smt Indu Barua V/s. CWT [ 1980] 125 ITR 436 by the Gauhati High Court that infringement of law is complete on the date when the assessee fails to file a return under Sec.14(1) of the Act and the quantum of penalty for default must be determined with reference to the law prevailing on the day when the default was committed and the law applicable on that date in regard to the penalty will be applicable and not the law as amended from time to time. It has also been held in the case of CWT V/s. M. R. Mahajan [1980] 126 ITR 706 by the Punjab and Haryana High Court that a fiscal statute cannot be construed retrospectively unless there are clear words to that effect in the statute itself and that Sec.18(1)(i) of the Act, as amended by the Finance Act, 1969, is not retrospective in its operation and that late filing of return as contemplated by Sec.18(1)(i) of the Act is not a recurring offence and the offence is complete on the date when the return is not filed as prescribed by law and the offence is committed when the return is not filed on the due date and the penalty has to be computed in accordance with the provisions of the law as it prevailed at the time of the commission of the offence. 31. All the above decisions have been upheld by their Lordships of the Supreme Court in the case of CWT V/s. Suresh Seth [1981] 129 ITR 328 where their Lordships were considering Sec.18(1)(a) of the Act. 31. All the above decisions have been upheld by their Lordships of the Supreme Court in the case of CWT V/s. Suresh Seth [1981] 129 ITR 328 where their Lordships were considering Sec.18(1)(a) of the Act. It has been held in this decision that where the default complained of is one falling under Sec.18(1)(a) of the Act (e.g., failure to file the return of wealth before the due date without reasonable cause), the penalty has to be computed in accordance with the law in force on the last day on which the return in question had to be filed and that neither the amendment made in 1964 nor the one made in 1969 to Clause (i) of Sec.18(1) of the Act has retrospective effect. 32. Prom my discussions above, it is evident that the offence was complete on June 30, 1969, when the return was due under Sec.14(1) of the Act On June 30, 1969, the present proviso was not in existence. The assessee in this case filed return on February 23, 1970, when the proviso was not in existence as the proviso to Sec.14(1) of the Act, came into existence only from April 1, 1970. Thus, even if it is held that the proviso will extend the period of limitation, it will not apply in the case of a return which was due on June 30, 1969, on which date the offence was complete and so the period cannot be extended as it had already expired on June 30, 1969. 33. In view of the decisions mentioned above, the law applicable will be the law as on June 30, 1969, and hence the proviso to Sec.14(1) of the Act, will not be applicable in this case. 34. The Appellate Tribunal has already held that there was no reasonable cause for delay in filing of the return and the Appellate Tribunal extended the period only on the basis of the proviso to Sec.14(1) of the Act. Once it is held that the proviso to Sec.14(1) is not applicable to the default which had been committed on June 30, 1969, when the return was due, then the penalty has to be calculated from June 30, 1969, for default of seven months. Once it is held that the proviso to Sec.14(1) is not applicable to the default which had been committed on June 30, 1969, when the return was due, then the penalty has to be calculated from June 30, 1969, for default of seven months. In this case, even the return was filed on February 23, 1970, and in such a case, the assessee cannot take shelter under the proviso to Sec.14(1) which came into force on April 1, 1970. 35. In view of my discussions above, I hold that the Tribunal was not justified in applying the provisions of the proviso to Sec.14(1) of the Act and in holding that the default under Sec.18(1)(a) of the Act was for a period of four months only. 36. In view of my findings above, the question referred is answered in the negative and in favour of the Revenue and against the assessee. However, in view of the peculiar circumstances of the case, the parties will bear their own costs. Uday Sinha, J. 37 I agree.