- (1.) The present Income-tax Appeal filed under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as - the Act) has been admitted vide order dated 1-9-2007 on the following substantial question of law: Whether, the Tribunal has erred in law by holding that as the assessed income was a loss therefore, there was no case made for levy of penalty under Section 271(1)(c), despite the fact that the Bombay High Court in the case of CIT v. Chemiequip Ltd., 2004 265 ITR 265 has held that after the legislative amendments carried out to the provision of Section 271(1)(c) penalty under Section 271(1)(c) was exigible in loss cases.
(2.) Briefly stated the facts giving rise to the present appeal are as follows: The respondent-assessee is a Public Limited Company and is engaged in the business of printing and publishing of newspapers and journals, etc. For the assessment year 1991-92 the assessee had filed its return of loss of Rs. 1,22,97,522. The assessment was completed under Section 143(3) of the Act on 20-9-1993 on a total loss of Rs. 59,39,045 as against the returned loss of Rs. 1,22,97,522. As the amount of loss was reduced in the assessment proceeding, the proceedings under Section 271(1)(c) of the Act for imposition of penalty for concealment was initiated. The Deputy Commissioner of Income Tax, Special Range-Ill, Lucknow vide order dated 26-2-1996 after considering the explanation given by the assessee imposed a sum of Rs. 13,76,302 as penalty. Feeling aggrieved the assessee preferred an appeal before the Commissioner (Appeals) who vide order dated 4-9-1996 allowed the appeal and cancelled the order of penalty which has been upheld by the Tribunal.
(3.) We have heard Sri D.D. Chopra, learned senior standing Counsel for the revenue Sri J.N. Mathur, learned Counsel has put in appearance for the respondent-assessee.;