2009 (2) TMI 81 - HC - Income Tax

Whether penalty u/s 271(1)(c) can be levied in case of actually assessed loss, by taking recourse to Explanation 4 to the said section - Larger Bench decision of the Apex Court in case of GOLD COIN HEALTH FOOD P.LTD, has stated that amendment brought about by Finance Act 2002 is only clarificatory in nature and applies even to Assessment Years prior to 1st April 2003 applying this ratio held that Tribunal was not right in deleting penalty levied under Section 271 (1)(c)

Summary

The Gujarat High Court upheld a penalty of Rs.4,00,000 under Section 271(1)(c) of the Income Tax Act for the Assessment Year 1988-1989. The court clarified that the penalty can be imposed even in case of assessed loss, citing a previous Supreme Court decision. The Income Tax Appellate Tribunal was found to be incorrect in deleting the penalty. The appeal was allowed with no costs.