Three years default......penalty clause

What are you trying to ask is not clear? Please elaborate your doubt.

I have not pay any income tax for last 10 years since retirement. Now bank wants me to produce income tax assessment order for last three year. I have applied for House loan. I have to show income at 15 lakh Per year. So if I submit  income tax return For last three years showing an income of 15 lakh per year will I come under prosecution other than fine for late submission.

Showing 15 lakhs per year would be subjected to payment of tax nearly around 300000 per year + interest on tax+ interest on non filing + penalty for not filing the returns. Which would sum up to around 350000 tax per year.

Which means you will be subjected to pay around 10lakhs just for filing the returns. And if AO finds anything suspicious, he may levy additional penalty.

Think wisely before filing returns and that too showing bogus figures

Sir 10  years after retirement you are buying a home. Tell the HFC that you have not filed any return . Tell them you can give solvency certificate of  like amt in case your assests are hefty.   

My property valuation is six crores as per bank valuer. I need one crore to complete an old building which I have acquired. But ban insists on it return for three years.

Then Dont take loan from Bank bcoz they will not give it unless ITR  is filed for last three years.

Take from Sundaram or Tata capital 

Get in touch with you local CA with past history of income and bank records, he may advise you a suitable remedy