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TMI Blog2013 (10) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty under section 271(1)(c) of the Income-tax Act cannot be levied in a case where the assessed income is a loss ?" At the outset it is necessary to briefly mention the facts leading to the reference. The assessee-firm is a civil contractor. They filed the return of income for the assessment year 1990-91 showing loss of Rs. 28,27,249. The Incometax Officer completed the assessment under section 144 of the Act. While doing so, he added Rs. 19,15,002 and reduced the addition of Rs. 10,00,000 to Rs. 7,45,253, and determined the tax payable at Rs. 9,03,375. Penalty proceedings were also initiated separately under section 271(1)(c) of the Act and an amount of Rs. 14,34,294 was imposed as penalty by order dated March 16, 1993. The Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax payable by him, a sum which shall not be less than and which shall not be more than three times "the amount of tax sought to be evaded" by reason of such concealment shall be levied and collected as penalty. Even if a loss return is filed, if the amount of concealment has the effect of reducing the loss in the return or converting such loss into income, section 271(1)(c) of the Act is attracted. It is well settled that a taxing statute has to be strictly interpreted by giving a plain meaning to the clear and unambiguous language used by the Legislature. The script of law cannot be read in such a manner which has the effect of changing the spirit of law. When Explanation 4(a) clearly speaks of the return of loss and also deals with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behind section 271(1)(c) of the Act was to penalise the assessee for concealing the particulars and furnishing inaccurate particulars of income, whether the income returned is a profit or loss are really of no consequence and that Explanation 4 to section 271(1)(c) was clarificatory in nature and would apply to all assessments even prior to the assessment year 2003-04. On consideration of the recommendations of the Wanchoo Committee pursuant to which Explanation 4(a) was inserted, the Central Board of Direct Taxes Circular No. 204, dated July 24, 1976, the Finance Act, 1979, the relevant clauses of the Finance Act, 2002, and the case law dealing with interpretation of statutes being prospective or retrospective, the three-judge Bench in Gol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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