Law:

Section:

2008] 304 ITR 308 [2008] 172 TAXMAN 386 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax* , Ahmedabad v. Gold Coin Health Food (P.) Ltd. DR. ARIJIT PASAYAT AND P. SATHASIVAM AND AFTAB ALAM, JJ. CIVIL APPEAL NO. 5065 OF 2008 AUGUST 18, 2008 Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Whether amendment made in Explanation 4 to section 271(1)(c)(iii) with effect from 1-4-2003 is clarificatory and, therefore, will have retrospective effect - Held, yes Circulars and Notifications : Department Circular No. 204, dated 24-7-1976 FACTS Expressing doubt about the correctness of the rendered by a Division Bench of the Supreme Court in Virtual Soft Systems Ltd. v. CIT [2007] 159 Taxman 155, a reference has been made by another Division Bench by order dated 7-4-2008 to a Larger Bench. The question which was decided in Virtual Soft Systems Ltd.'s case (supra) was as to whether the penalty under section 271(1)(c) could be levied if the returned income was a loss. This question has to be considered in the background of the amendment made by the Finance Act, 2002 with effect from 1-4-2003 in the Explanation 4 to section 271(1)(c)(iii ). In Virtual Soft Systems Ltd.'s case (supra), the department placed reliance on Notes on Clauses relating to the aforesaid amendment to submit that the amendment was clarificatory in nature and, consequentially, it was applicable retrospectively. That argument was rejected by the Court. The Division Bench, while making reference, was of the view that the true effect of the amendment was not considered, as it was prima facie of the view that merely because the amendment was stated to take effect from 1-4-2003, that could not be a ground to hold that the same did not have the retrospective effect. The revenue submitted that the true scope and ambit of the amendment had been lost sight of in Virtual Soft Systems Ltd.'s case (supra). It was submitted that the purpose behind section 271(1)(c) is to penalize the assessee for : (a) concealing particulars of the income; and/or (b) furnishing inaccurate particulars of such income and, therefore, whether income returned is a profit or loss is really of no…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492