TMI Blog2004 (5) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 76,41,420. In the return, inter alia, it claimed depreciation of ₹ 20,85,480. The Assessing Officer completed assessment on a loss of ₹ 64,82,308 after disallowing depreciation to the extent of ₹ 11,59,113. 3. Penalty proceedings were initiated under section 271(1)(c) for concealment of income. The assessee explained that since it had incurred a huge loss, the question of concealing any income did not arise. It also relied on the judgment of the Punjab Haryana High Court in CIT v. Prithipal Singh Co. [1990] 183 ITR 69 where it was held that if both the returned income and assessed income were negative figures (i.e., losses) no penalty could be imposed for concealment of income. 4. The Assessing Officer re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Assessing Officer himself had fallen into the same error, but gave no finding on it. 6. The Department is in appeal to urge on the strength of the judgment of the Bombay High Court in CIT v. Chemiequips Ltd. [2004] 265 ITR 265 that even a case where the loss returned by the assessee is reduced on assessment would be covered by Explanation 4 to section 271(1)(c) and, therefore, the CIT(A) is wrong in cancelling the penalty. On the order hand, the learned Counsel for the assessee strongly relied on the judgment of the Supreme Court in CIT v. Prithipal Singh Co. [2001] 249 ITR 670 in which the judgment of the Punjab Haryana High Court cited supra was confirmed. It was submitted that the authority of the judgment of the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion of any penalty does not arise. Evasion of tax is a Sine quo non for imposition of penalty; (c) Explanations 3 and 4 to section 271(1)(c) also presuppose taxable income with regard to the assessment year in question; (d) there can be no motive to avoid tax during the year if there is no income assessed. This judgment was taken in appeal by the Department to the Supreme Court. The judgment of the Supreme Court is reported in Prithipal Singh Co.'s case (supra). It is as below:- ORDER We have heard Ld. Counsel and find that, on the facts of this case, no interference is called for. The civil appeal is dismissed. No order as to costs. 8. It may be seen from the judgment of the Supreme Court that the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a non-speaking order, the doctrine of merger applies and the High Court's judgment merges with that of the Supreme Court. Again, in page 381 it was held that even if the order passed in appeal by the Supreme Court is a non-speaking or brief order, nevertheless, the order shows the exercise of appellate jurisdiction and therein the merits of the order impugned having been subjected to judicial scrutiny of this court . Thus once the appellate jurisdiction is exercised by the Supreme Court the impugned judgment is subject to scrutiny on merits and its approval either by an elaborate or reasoned judgment or by a brief or non-speaking order - an order which only says that the court sees no reason to interfere on merely that the High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment and expressly and clearly made retrospective in operation is well taken. This shows that when the Legislature wanted, it did make the law retrospective and the omission to do so, when Explanation 4 to section 271(1)(c) was amended, was deliberate and conscious. 12. The Ld. Counsel for the assessee questioned the satisfaction of the Assessing Officer that the assessee has concealed its income or filed inaccurate particulars thereof. Though this appears to be a new point, since it goes to the root of the matter and does not involve any fresh investigation into facts not already on record, we permit him to raise the same. He says that the order passed by the Assessing Officer does not disclose any satisfaction on his part that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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