Penalty under Section 271(1)(c) revisited after Gold Coin Health Food overruled the earlier view relied on by the Tribunal.

Penalty under Section 271(1)(c) could not be sustained merely on the basis of Virtual Soft Systems Ltd. after the larger Bench ruling in Gold Coin Health Food Pvt. Ltd. settled the law differently. The Court noted that the assessee's loss assessment and the Tribunal's reliance on the earlier view were no longer sufficient once the later decision had overruled that position. The Tribunal's order was therefore set aside and the matter remanded for fresh decision in accordance with law.

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Issues: Whether the deletion of penalty under Section 271(1)(c) of the Income-tax Act, 1961 could be sustained on the basis of Virtual Soft Systems Ltd. after the later decision in Gold Coin Health Food Pvt. Ltd., and whether the Tribunal's order required interference.

Analysis: The assessee had been assessed at a loss, and penalty under Section 271(1)(c) had been deleted by the first appellate authority and affirmed by the Tribunal by following Virtual Soft Systems Ltd. The Court noted that the legal position had since been settled by the larger Bench decision in Gold Coin Health Food Pvt. Ltd., which overruled the view relied upon by the Tribunal.

Conclusion: The Tribunal's order was set aside and the matter was remanded to the Tribunal for fresh decision in accordance with law.

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