Concealment penalty applies even with loss return and nil assessed income after the earlier view was displaced.

Penalty for concealment could not be sustained on the basis that the return showed a loss and assessed income was nil, because that earlier view in Virtual Soft Systems no longer governed after the Supreme Court's ruling in Gold Coin Health Food Private Limited. The Tribunal had deleted the penalty on the footing that concealment penalty required positive income, but that reasoning was rejected. The questions were answered in favour of the Revenue, the Tribunal's view was set aside, and the matter was remanded for decision on the remaining surviving issues.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 could be sustained in a case where the return disclosed a loss and assessed income was nil, and whether the earlier view in Virtual Soft Systems applied notwithstanding Explanation 4 to section 271(1)(c).

Analysis: The Tribunal had deleted the penalty by relying on the view that no concealment penalty could be levied where there was no positive income. The Revenue pointed out that this position was subsequently overruled by the Supreme Court in Gold Coin Health Food Private Limited, and that the earlier reasoning could not continue to govern the controversy.

Conclusion: The questions were answered in favour of the Revenue and against the assessee. The Tribunal's view was set aside and the matter was remanded for decision on the remaining surviving issues.

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