2007 (4) TMI 188

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....is a Private Limited Company. For the assessment year 1982-83, it filed return declaring net loss of Rs.3,95,000. The Assessing Officer completed the assessment at net loss of Rs.3,77,231. For Assessment year 1983-84, it filed return declaring net loss of Rs.11,65,020/-. The A.O. completed the assessment at net loss of Rs.1,00,882/-. Quantum appeal filed by assessee for Assessment Year 1983-84 was dismissed by the CIT(A). Against the order of CIT(A), the assessee filed appeal before ITAT, however, at the time of hearing the learned counsel for the appellant did not press the appeal and the same was dismissed. 3. The A.O. levied penalty under Section 271(1)(C) Rs.7,250/- and Rs.2,23,000/- for assessment year 1982-1983 & 1983-84 respective....

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....enalty arises and no penalty under Section 271(C) is leviable and, allowed the appeals filed by the assessee.  Thereafter the Revenue filed an application for referring the aforesaid question to this High Court for its opinion and on the request of Revenue the aforesaid question has been referred to this High Court for its opinion. 4. We have heard Shri R.D. Jain, learned Senior Advocate on the question referred to us and his submission is that in view of explanation 4 of Section 271(1)(C) which explains the expression " tax sought to be evaded" penalty is leviable even in case of loss. However, he could not point out any decision in support of his submission. 5. We have perused the provisions of sub-Section 271(1)(c)(iii) of the....

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.... been the total income;] (b) in any case to which Explanation 3 applies, means the tax on the total income assessed; (c) in any other case, means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished.]" 6. In view of the aforesaid provision, we are in full agreement with the decision of the Punjab and Haryana High Court in the case of Prithvipal Singh & Company(supra) that the penalty imposed is paid in addition to the tax payable and the evasion of tax is the sine qua non for imposition of penalty and in Clause (iii) of Clause ....