CIT Vs. CHIRAG METAL ROLLING MILLS (P) LTD

JUDGEMENT

(1.) In the above appeals, same/similar question of law is involved which reads as under:

(2.) For the purpose of this decision, facts are being taken from ITA No. 17/2006. In respect of the assessment year 1994-95, the respondent filed a return of income on 30-11-1995 declaring total income as Nil. On completion of the assessment under Section 143(3) of the Income Tax Act, 1961 at loss after addition made by the assessing officer, penalty proceedings under Section 271(1)(c) were initiated. Accordingly, a show cause notice was issued to the respondent-assessee as to why the penalty be not levied. The respondent-assessee filed reply but the assessing officer, after considering all the facts and circumstances of the case, levied penalty under Section 271(1)(c) amounting to Rs. 9,00,000. On appeal, the Commissioner of Income-tax, however, set aside the penalty and ITAT on further appeal, has upheld the order passed by the Commissioner (Appeals) and dismissed the departmental appeal.

(3.) In the context of the above facts, the department contends that after amendment of Explanation 4 to Section 271(1)(c) of the Act, penalty was leviable even in cases where after making addition of the income concealed, the return was Nil or loss.