RAM RATTAN, A.M.: Order This appeal by assessee is directed against order of AAC, Income-tax, Patiala Range, Patiala, sustaining penalty of Rs. 24,047 levied by ITO under s. 271(1)(c) of IT Act, 1961 ( Act ) for asst. yr. 1975-76. 2 . assessee was partner in firm Hukam Chand Swarn Singh Nangal. In return of income filed by assessee on 25th Sept., 1975, assessee did not disclose above source of income. There was no mention either in return of income filed or during course of assessment proceedings about fact that asessee was partner in said firm and that he had earned income therefrom. In return filed, sources of income declared were income from business and income from self-occupied property. declared income of Rs. 15,880. Assessment was made on 28th Feb., 1976 on income of Rs. 17 ,500 on agreed basis. Subsequently, it came to notice of ITO that assessee had also received income from share of profit from firm Hukam Chand Swarn Singh which he had failed to declare in his individual return. He, therefore, issued notice under s. 148 of Act dt. 15th Feb., 1977 which was served upon assessee on 2nd March, 1977. While acknowledging receipts of notice under s. 148 assessee mentioned on notice itself that return filed on 23rd Feb., 1977 may be treated as compliance to this notice. It would, thus, appear that after issue of notice under s. 148 on 15th Feb., 1977 and before its service on 2nd March, 1977, assessee filed second return of his total income 23rd Feb., 1977, which assessee wanted to be treated as return in response to notice under s. 148. ITO on basis of above return made reassessment of total income of assessee including therein share income from firm at Rs. 26,929 as determined in case of firm. ITO also initiated penalty proceedings under s. 271(1)(c) and imposed penalty of Rs. 24,047 which is 100 per cent of amount concealed. submission before him was that share income of assessee in aforesaid firm was intimated to assessee only in October 1976 when firm filed return which Income-tax Department. It was, therefore, urged that mistake of not showing share income from above firm was purely unintentional. assessee, however, admitted that he was partner in said firm from September 1974 and was having one-third share in profits and losses. above submission did not find favour with ITO. He, therefore, imposed penalty as mentioned above. AAC has upheld penalty imposed at Rs. 24,047. 3. assessee is aggrieved and is in second appeal before Tribunal. Shri D.S. Gupta, learned counsel for assessee, before arguing case, gave following information about various dates which are material for purpose of determining issue 25th 1. Date of filing original return Sept., 1975 28th 2. Date of completion of assessment on original return of Feb., agreed basis at Rs. 17 ,500 1976 27th 3. Date of defective return (unsigned return) filed by Sept., firm in which assessee was partner 1976 18th 4. Date on which effective return (signed) was filed in Jan., case of firm in which assessee was partner 1977 15th 5. Date of issue of notice under s. 148 Feb., 1977 2nd 6. Date of service of notice under s. 148 on assessee March, 1977 7. Date of filling supplementary return by assessee 23rd including therein share income from firm Hukam Chand Feb., Swarn Singh 1977 29th 8. Date of completing assessment in case of March, firm in which assessee was partner 1978 16th 9. Date of reassessment order in case of Oct., assessee 1979 From above date, Shri D.S. Gupta tried to establish that original assessment in case of assessee was completed on 28th Feb., 1976. Till then return of income in case of firm in which he was partner was not filed by firm. defective return in that case was filed on 27th Sept., 1976 and effective return on 18th Jan., 1977. It was, therefore, contended that omission of share income in return filed by assessee on 25th Sept., 1975 was inadvertent. He further pointed out that effective return in case of firm was filed on 18th Jan., 1977 and thereafter assessee filed revised return on 23rd Feb., 1978 suo motu before being detected by Department. It was contended that even though ITO had issued notice under s. 148 on 15th Feb., 1977 but it was not served upon assessee till 2nd March, 1977. supplementary return was filed voluntarily on 23rd Feb., 1977 after firm in which assessee was partner had filed its return on 18th Jan., 1977. It was, therefore, urged that omission on part of assessee to include share income in original return file being unintentional and its voluntary disclosure thereafter on 23rd Feb., 1977, before any service of notice on assessee on 2nd March, 1977, no penalty under s. 271(1)(c) was exigible. sum and substance of submissions by Shri Gupta is that omission was inadvertent and when it came to his notice he filed supplementary return voluntarily without being detected by Department. 4. Shri D.S. Gupta then raised certain legal issues about jurisdiction of ITO in levying penalty. He pointed out that original return in this case was filed on 25th Sept., 1975 and, therefore, machinery to levy penalty was as it stood on 25th Sept., 1975. He pointed out that at that time it was IAC who was competent to levy penalty, whereas penalty has been imposed by ITO and, therefore, penalty order passed is without jurisdiction. In support of this contention he relied on decision of Supreme Court in case of Brij Mohan vs. CIT (1979) 12 CTR (SC) 198 : (1979) 120 ITR 1. He further pointed out that in order passed by ITO under s. 271(1)(c) in paragraph 3 he has mentioned that penalty proceedings under s. 271(1)(c) for concealing income and furnishing of inaccurate particulars in original return were initiated. He further pointed out that in notice issued under s. 274 of Act asking assessee to show cause as to why penalty should not be levied, ITO has mentioned charge as concealment of particulars of income or furnishing inaccurate particulars of such income. He, therefore, urged that charge was not specific but illusory. In this connection he relied upon decision of Calcutta High Court in case of CIT vs. A.K. Das (1970) 77 ITR 31. That being position, learned counsel for assessee contended that ITO did not acquire any jurisdiction to levy penalty and subsequent penalty order passed by him and sustained by AAC is bad in law. 5. Another point about jurisdiction of ITO made out by him is that in reassessment of income of assessee he has included concealed income at Rs. 26,928 whereas penalty has been imposed at Rs. 24,047 which is less than minimum penalty imposable under s. 271(1)(c). It was, therefore, contended that penalty imposed was not according to law and therefore, penalty order was bad in law even on this point. 6 . Lastly, it was contended that supplementary return filed by assessee on 23rd Feb., 1977 was not valid return inasmuch as it was filed after original assessment was made on 28th Feb., 1976 and before service of n o t i c e under s. 148 on 23rd March, 1977. He, therefore, urged that reassessment framed by ITO on 16th Oct., 1979 on invalid return is also invalid. He further contended that assessee having already suffered taxes even though assessment made was bad in law, he cannot be made to suffer further by visiting him with penalty under s. 271(1)(c). According to him, ITO could not acquire jurisdiction to impose penalty in course of assessment proceedings which were bad in law. He, therefore, urged that penalty order was liable to be cancelled. 7 . Shri R.K. Bali, learned senior Departmental representative, on other hand, pointed out that omission of share income from firm in return of assessee was deliberate and not unintentional. In support of his contention he pointed out that on supplementary return filed by assessee on 23rd Feb., 1977 verification has been signed on 16th Feb., 1976, i.e., even before completion of first assessment on 28th Feb., 1976. He urged that this return was available with assessee even during course of original assessment proceedings but he did not care to file same. According to him, he was sitting on fence that in case ITO could detect same during original assessment proceedings, return will be filed and in case it did not come to his notice, return will not be filed. He submitted that he succeeded in second design, i.e., ITO did not detect same during course of original proceedings and, therefore, assessee did not file same even though share income was in his knowledge. He also pointed out that explanation by assessee that he came to know about share income only after return in case of firm in which he was partner was filed is afterthought and deserve to be rejected. 8 . With regard to jurisdiction he pointed out that decision of Supreme Court in Brij Mohan s case (supra) relied upon by assessee was with regard to quantum of penalty to be levied and not on point of jurisdiction. He further contended that provisions regarding machinery to impose penalty were procedural and not substantive and, therefore, ITO had rightly assumed jurisdiction. He further pointed out that reassessment in this case was made on 16th Oct., 1979 when only officer to impose penalty under s. 271(1)(c) was ITO. He, therefore, contended that ITO validly acquired jurisdiction to impose penalty. For this proposition, he relied upon decision of Madhya Pradesh High Court in case of Addl. CIT vs. Jamnalal Ramlal Kimtee (1983) 139 ITR 625 and also of Punjab and Haryana High Court in case of Smt. Dayawanti vs. CWT (1981) 20 CTR (P&H) 118 : (1981) 128 ITR 504 (P&H). 9 . With regard to other objection that ITO did not have satisfaction inasmuch as he did not specifically mention charge. Shri R.K. Bali relied upon decision of Calcutta High Court in case of Rahmat Bali relied upon decision of Calcutta High Court in case of Rahmat Development & Engg. Corpn. vs. CIT (1981) 20 CTR (Cal) 228 : (1981)130 ITR 602 (Cal) and submitted that ITO had validly acquired jurisdiction. 10. Regarding incorrect penalty imposed by ITO, Shri Bali pointed out that penalty intended to be imposed by ITO was at Rs. 26,928 and not at Rs. 24,047. In support of this contention he submitted that since penalty imposable was more than Rs. 25,000 he had made proposal to AAC for his approval as required under law, In proposal he had proposed to levy penalty of Rs. 26,928. Not only, this, IAC also approved levy o f penalty at Rs. 26,928. He, therefore, urged that it was through inadvertent mistake that while imposing penalty under s. 271(1)(c) ITO mentioned t h e penalty at Rs. 24,047. He, therefore, urged that this being apparent mistake was rectifiable under s. 154 of Act and did not affect jurisdiction of ITO. 1 1 . Lastly, he contended that supplementary return filed by assessee on 23rd Feb., 1977, r/w his endorsement on notice under s. 148 received by him on 2nd March, 1977 that return filed on 23rd Feb., 1977 may be treated as return in response to notice under s. 148 was valid return. He also pointed out that assessee filed letter addressed to ITO in response to notice under s. 148 wherein in paragraph 4 he has mentioned as under : "1. That notice under s. 148 was received by me on 2nd March, 1977. 2. That I filed revised return on 23rd Feb., 1977 declaring my share from Hukam Chand Swarn Singh, Nangal. 3. ** ** ** 4. That return filed may kindly be considered as voluntary and may also be treated as compliance to your notice under s. 148. Sd/- (Swarn Singh)" Shri Bali pointed out that by this letter assessee had regularised return and, therefore, it was valid return and assessment was also valid. He, therefore, contended that there was no merit in submissions made on behalf of assessee. 12. We have very carefully considered rival submission. We shall deal with various points raised by Shri D.S. Gupta and Shri R.K. Bali in following paragraphs. 13. first point made by learned counsel for assessee is that omission to show share income in original return was inadvertent. We do not agree. supplementary return was filed by assessee on 23rd Feb., 1977. verification on this return was made on 16th Feb., 1976 and original assessment was completed on 28th Feb., 1976. This clearly shows that during course of original assessment proceedings this return was available with assessee but he did not care to file same before ITO or even to disclose fact that he was partner in firm having one third share therein. We agree with Shri Bali that assessee was sitting on fence and he succeeded in his design in not filing this or disclosing share income so long as ITO could not detect same. Then we notice that even return in case of firm in which he was partner (though unsigned) was filed on 27th Sept., 1976 but he did not care to file return suo motu till 23rd Feb., 1977. If his bona fides were clear, he should have filed return immediately after it came to his notice when return was already in his possession and no attempt was to be made to consult counsel or to obtain figures from firm. Even effective return in case of firm was filed on 18th Jan., 1977 but assessee did not file supplementary return till 23rd Feb., 1977. Taking into consideration totality of circumstances of case as discussed above, we have no doubt in our mind that omission on part of assessee to disclose his share income in firm Hukam Chand Swarn Singh or subsequently during course of assessment proceedings was deliberate. authorities below were, therefore, justified in imposing penalty. 14. issue regarding jurisdiction of ITO to impose penalty already stands settled by decision of Hon ble Punjab and Haryana High Court in case of Smt. Dayawanti (supra) and also of Madhya Pradesh High Court in case of Jamnalal Ramlal Kimtee (supra), wherein decision of Hon ble Supreme Court in Brij Mohan s case (supra) has also been considered. We have, no doubt, in our mind that provisions relating to machinery for imposing penalties are procedural in nature and, therefore, have retrospective effect. We, therefore, do no find any merits in this contention of assessee as well. 15. With regard to second issue raised by learned counsel for assessee that ITO did not frame any specific charge, we may point out that reference to assessment order passed by ITO reveals that he initiated penalty proceedings under s. 271(1)(c). Sec. 271(1)(c) consists of two limbs : (i) concealing particulars of income, or (ii) furnishing inaccurate particulars of such income. In show-cause notice issued by ITO under s. 274(2), ITO has mentioned both, i.e., concealment of particulars of income or furnishing of inaccurate particulars of income. This is standardised printed notice by Department. ITO did not strike out inapplicable alternative. learned counsel for assessee is making capital out of this omission on part of ITO in not striking out inapplicable alternative. point to be considered, therefore, is whether such technical error on part of ITO will vitiate his jurisdiction. In assessment order through which penalty proceedings were initiated there are no alternatives mentioned by ITO. Reference has been made to s. 271(1)(c). It is only in notice that he has not struck out one of alternatives. assessee has acted upon this notice and has fully understood as to what exactly ITO wanted assessee explain. assessee having understood it well and having furnished reply and not having raised any objection either before ITO or even before AAC, about vagueness of notice we are of opinion that situation created in notice under s. 274(2) would not make it illusory so long as assessee had understood context in which notice was issued. In our opinion, it is only technical mistake on part of ITO in not scoring out one of two alternatives inadvertently. On facts of case, it is clear beyond any shadow of doubt that it is case concealing particulars of income. assessee also understood it fully well when he says that omission was inadvertent. Whether assessee has concealed particulars of income or furnished inaccurate particulars of income, end result in both cases is same which is under statement of income. 16. Then in penalty order passed by ITO he has mentioned it as charge of concealment of particulars of income under s. 271(1)(c). In paragraph 6 of his order he has observed thus : I am of considered opinion that charge of concealment of particulars under s. 271(1)(c) becomes complete when assessment is completed in first instance . Their Lordships of Calcutta High Court in case of Rahmat Development & Engg. Corpn. (supra) have held that inaccurate particulars may be furnished in order to strengthen concealment of income. Therefore, though expression concealed particulars of his income and furnished inaccurate particulars of such income are used in disjunctive terms in s. 271(1)(c) and these are two separate offences, commission of one does not exclude possibility of commission of other. two charges can and very often subsist together. Even in ratio of above decision of Hon ble Calcutta High Court we do no find any merit in contentions made on behalf of assessee. 17 . last objection of Shri Gupta is that supplementary return filed on 23rd Feb., 1977 on basis of which reassessment has been made on 16th Oct., 1979 was invalid and, therefore, no penalty could be initiated and imposed on basis of invalid order. submission of Shri Gupta was that even though assessee had informed ITO through endorsement on notice under s. 148 itself and subsequent letter that return filed on 23rd Feb., 1977 may be treated as return in compliance with notice under s. 148 but did not made return as valid. He submitted that assessee even by consent could not confer jurisdiction on ITO. He pointed out that on every return of income verification is to made which is to be signed by assessee. This verification has to be made on date when return has been signed. date of verification of return continues to be made 16th Feb., 1976 and, therefore , this was not valid return. On other hand, submission by Shri Bali was that date of verification was substituted by endorsement on notice of return by assessee as well as subsequent letter filed by assessee. issue has far-reaching effect. In large number of cases in Income-tax Department, practice followed is that assessee would allure Income-tax Department, practice followed is that assessee would allure Department to treat such returns voluntarily filed as returns in response so statutory notices under s. 148. Not only this, Department also acts on such returns. At same time date of verification on return remains one which was prior to issue of notice under s. 148. Whether date on verification in return will get substituted by subsequent endorsement on notice under s. 148 by assessee and subsequent letter is issue which needs to be thrashed out after full deliberations. Since it has far-reaching effect, we do not want to scuttle same here. We are of opinion that this issue should be restored to file of AC who should record clear finding after giving opportunity to both parties as to whether in such circumstances return and consequent assessment was valid one. On other hand, if it is held that is was not valid return and, consequently, assessment framed thereon was also invalid, finding should also be recorded whether assessee was also estopped from taking such plea in penalty proceedings when assessment had become final. We, therefore, set aside order of AAC and restore issue to his file for fresh determination regarding jurisdiction of ITO to impose penalty on these limited points. 18. In result, appeal is allowed for statistical purpose. *** SWARN SINGH v. INCOME TAX OFFICER