1. SALEEM AKHTAR, J. The Department has filed application under sec--tion 66(1) of the Income-tax Act raising the following question :- "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that section 45-A of the Income-tax Act 1922 cannot apply retrospectively to the assessment trade for assessm ent year 1954-55?"
2. Briefly the faces are that the original assessment in respect of assessment year 1954-55 was trade under section 23(3) of the Income-tax Act, on 30th June, 1959. On 17-5-1969 the Income Tax Officer passed an order under sec--tion 45-A of Income-tax Act imposing additional income-tax of Rs.
3. 5.584. The respondent filed an appeal contending that section 45-A came into force on 1-7-1963, and therefore, it cannot apply to an assessment for an earlier year. The learned Tribunal allowed the appeal, and act aside the order. Section 45-A was added by Finance Act, 1963 and was substituted by Finance Act, 1966, whereby any assessee who was failed to pay the tax due from him or has paid A tax under section 22-A which is less than 80 %, of the tax payable was liable to pay additional amount of tax. Section 45-A when introduced by the Finance Acts, 1963 and 1966 did not make its operation with retrospective effect. Section 45-A is in the nature of penal provision, whereby additional tax is imposed in case of default in payment of tax. Such a liability was for the first time created in 1963. There is nothing to show that it could be applied in respect of priding assessm ent years. A penal provision cannot operate retrospectively unless it is so provided by the statute itself.
4. Mr. Abdul Waheed Farooqui has frankly stated that section 45-A cannot be applied on the respondent. He has stated that the view taken by that Tribunal is correct. We, therefore, answer the