In Brief
The Supreme Court upheld the High Court's judgment that no penalty can be imposed under section 271(1)(c) of the Income-tax Act when both the income disclosed in the tax return and the income actually assessed are nil. The Court followed its earlier binding decision in Virtual Soft Systems Ltd. v. CIT. The Revenue's appeal against the High Court's order was dismissed, affirming that taxation penalties cannot be levied in situations where there is no income disparity between the return and assessment.
The lawyer headnote and full judgment text are available to registered users.