TaxTMI 
TaxTMI 
1988 (11) TMI 16
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....lanation to section 271(1)(c) will not be attracted to the present case ? (b) that the word income occurring in clauses (c) and (iii) of section 271 ( 1 ) refers to a positive income only and not to a loss? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in cancelling the penalty order passed by the Inspecting Assistant Commissioner by holding that no penalty could be levied against the assessee ? " The assessee, which was a firm existing in the assessment year 1970-71, filed its return for the said assessment year on September 30, 1970, declaring loss of Rs. 3,35,830. The Income-tax Officer, vide his order, annexure "A", found that it was a case of concealment and suppression of inc....
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....sed is paid in addition to the tax payable. When there is no tax payable, the question of any penalty does not arise. In fact, evasion of tax is the sine qua non for imposition of penalty. Clause (iii) deals with cases referred to in clause (c) under sub-section (1) of section 271 of the Act and it clearly provides therein that the penalty or further sum payable by person would be in addition to any tax payable by him. Explanations 3 and 4 annexed to the said provision of law also presuppose taxable income with regard to the assessment year in question. If there is no taxable income or tax assessed for payment during a particular year, the question of evasion and consequently penalty do not arise. As is obvious from annexure "B", the assess....