COMMISSIONER OF INCOME TAX Vs. NUCHEM LIMITED

JUDGEMENT

(1.) THE Revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (in short, "the Act"), against the order dated December 7, 2007, passed by the Income Tax Appellate Tribunal, Bench "H", New Delhi, in I.T.A. No. 1958(Del) of 2007, for the assessment year 1995 -96, proposing to raise the following substantial questions of law:

(2.) THE assessee filed a return of loss. The Assessing Officer while deter mining the net income to be nil, made additions to the returned income. The Commissioner of Income Tax (Appeals) deleted some of the additions. The Assessing Officer initiated penalty proceedings in respect of the additions, which were sustained by the Commissioner of Income Tax (Appeals). On appeal, the Commissioner of Income Tax (Appeals) set aside the penalty on the ground that where the return is of loss and income assessed is nil, there could be no penalty. This view has been upheld by the Tribunal, inter alia, in view of the judgment of the hon'ble Supreme Court in Virtual Soft Systems Limited : [2007] 289 ITR 83 (SC), wherein it was held that in the absence of any positive income and tax being attracted, penalty for concealment could not be levied.

(3.) IN view of the above, the questions proposed have to be answered in favour of the Revenue and against the assessee.