Concealment penalty survives a loss return, and waiver consideration must be decided by the competent authority.

Concealment penalty remains leviable even where the return declares a loss, because the earlier contrary view was displaced by the Supreme Court in Gold Coin Health Food P. Ltd.; the Tribunal's reliance on the overruled precedent was therefore unsustainable, and deletion of penalty could not stand. The penalty order was restored on the merits. Separately, the request for waiver was left for the competent authority, and the CBDT was directed to take a decision within one month in accordance with the court's earlier order.

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Issues: (i) Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 could be levied where the return declared a loss, and the earlier view permitting deletion of penalty continued to govern the case; (ii) whether a direction was required to the CBDT to consider waiver in terms of the court's earlier order.

Issue (i): Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 could be levied where the return declared a loss, and the earlier view permitting deletion of penalty continued to govern the case.

Analysis: The earlier view that penalty could not survive in a loss case had been reversed by the Supreme Court in Gold Coin Health Food P. Ltd., which held that concealment penalty remains leviable even where assessed income results in loss. The Tribunal's reliance on the earlier precedent was therefore unsustainable.

Conclusion: The issue was answered in favour of the Revenue and against the assessee; the deletion of penalty could not stand.

Issue (ii): Whether a direction was required to the CBDT to consider waiver in terms of the court's earlier order.

Analysis: The court noted the earlier direction requiring consideration of waiver in light of the assessee's financial position and recorded that the matter still required a decision by the competent authority.

Conclusion: The CBDT was directed to take a decision within one month in terms of the earlier order.

Final Conclusion: The appeal succeeded on the merits of the penalty issue, the Tribunal's order was set aside, and the Assessing Officer's penalty order was restored, while the waiver request was left to be decided by the CBDT in accordance with the court's direction.

Ratio Decidendi: Concealment penalty under section 271(1)(c) is leviable even where the assessed return shows a loss, and earlier contrary authority cannot prevail after the later binding Supreme Court ruling.

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